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VAT refund in Spain as a right which does not lapse after more than four years
A ruling of the TSJ Madrid, which also refers to the ruling of the Trinual Supremo of 4.7.2007, examines the nature of the credit which the taxpayer has with the tax authorities in the event that the input VAT should exceed the output VAT. We must remember that input VAT can be deducted over 4 years. If after this period, the input VAT has not been offset by the output VAT, the taxpayer may claim a refund of the surplus.
What is interesting about this ruling is that it responds to the question regarding what happens in the event that the taxpayer, either by error or ignorance, should forget to request a refund after the 4 year period. The ruling states that this right to a refund does not lapse after the four years, that is, it is not subject to presentation of a request for refund at the end of the 4 year period, but may in fact be requested much later. In other words, failure to exercise the option to request a refund does not mean the loss of the right to said refund. The ruling therefore suggests that the administration should systematically refund the surplus in the event that this was not claimed by the taxpayer.