On January 04, 2021, the Spanish General Directorate of Taxes (GDT) has issued a Resolution clarifying doubts affecting the VAT refund to companies or entrepreneurs established in the UK and in Northern Ireland.
As a consequence of the Brexit Agreement, the UK territories will no longer be part of the European Union. However, the territory of Northern Ireland will remain part of it in relation to the deliveries, inter community acquisitions and imports of goods.
✔ Such Resolution includes the following:
- The rigth to refund VAT to companies or entrepreneurs established in the UK and not established in the Spanish VAT territory (TAI) or in the EU, Canary Islands, Ceuta or Melilla, is conditioned to the specific requirement that UK reciprocity of treatment in favour of companies or entrepreneurs established in the TAI is proven.
- As a general rule, the conditions so determined for the refund of VAT paid in the UK by companies or entrepreneurs established in the Spanish TAI are equivalent to those of the Spanish VAT Law (37 / 1992) to refund Spanish VAT paid by companies or entrepreneurs established in the UK.
- In the UK, however, the following transactions are excluded from the mentioned reciprocity treatment:
- For the acquisition of goods and services that are not used in the business activity.
- For goods and services to be resold.
- For goods and services that relate to entertainments or recreational services.
- For the acquisition of automobile vehicles.
- 50% of the VAT paid for the rental or financial lease of an automobile vehicle.
✔ Accordingly, UK VAT companies or entrepreneurs shall be entitled to obtain the refund of Spanish VAT through the procedure established for non EU companies (article 119 bis of Spanish VAT Law), being obliged to appoint a fiscal representative resident in the Spanish TAI and prove that they carry on business activities in the countries where they are established:
- The application shall be done through the filing of Form 361.
- The request may be referred to input VAT paid during a quarter or within the calendar year and even refer to a period shorter than a quarter when it comprises the overall transactions performed in a relevant calendar year.
- The term to file an application shall start on the subsequent day to the end of each quarter or calendar year and shall conclude on the 30th September of the year following that to which the request relates.
- The total quotes included in a quarterly application cannot be lower than 400 euro or, when the application relates to all the transactions undertaken within a calendar year, to 50 euro.
- The applicant or its representative must accompany the application with a declaration in which the taxpayer states that it does not perform VAT subject activities in the Spanish TAI other than deliveries of goods or services in which the reverse charge mechanism applies or transportation and auxiliary exempt services.
✔ Companies or entrepreneurs resident in the Northern Ireland territory, while the specific Protocol for this territory remains in place and with respect to VAT paid for the acquisition of goods or services imported shall be entitled to apply for the VAT refund as if they were established in the EU, through the filing of Form 360. However and for VAT paid in relation to services acquired which are located in the Spanish TAI, the refund process shall be that applying to UK residents.
Publicado el 02-2021 por PBS