C/ Tuset, 20, 4º
Tel. (+34) 93 368 76 68
Fax (+34) 93 237 33 92
We advice multinationals because we are not one of them
What we must not forget: input VAT before and after the business activity is always deductible in Spain
VAT often accumulates before a company begins its ordinary business activity and likewise, when a company is undergoing a winding-up process and is no longer active. Two rulings will help us understand that under no circumstance will the input VAT be lost in either of these two stages of a business.
A consultation made to the Spanish administration on 7.7.2011, based on the criterion of a ruling from the ECJ of 3.3.2005 (C-32/03), states that the business status, and therefore that the input VAT shall be always deductible, will be maintained until the business has been definitively liquidated, even if the ordinary business activity towards the end is no longer carried out, consisting only of extraordinary administrative acts such as the sale of fixed assets of the business or the payment of a lease which cannot be terminated until the company ceases its activity (because, for instance, the agreement does not contemplate early termination of the lease). Therefore, the fact that removal from the Companies Register has been requested does not prevent the company from requesting the refund of input VAT if the pertaining returns are regularly presented and the invoices with input VAT meet all requirements.
Likewise, in a recent ruling on 1.3.2012 (C-280/10), the ECJ stated that all input VAT accrued prior to a future partner or businessman beginning business activity shall always be deductible, even if the invoices received contain a Spanish tax number (NIF) other than the one pertaining to the future company or business.
In short, in the absence of evidence of deceit or bad faith, VAT should never be an expense for the businessman.