Spain’s VAT Restrictions on Business Expenses: CJEU to Decide on EU Law Compliance

• Spanish Supreme Court has referred a question to CJEU regarding VAT deduction on business expenses
• Spanish tax regulations prevent companies from deducting VAT on expenses like business meals and corporate events
• Disputes between companies and tax authorities due to more restrictive regulations in Spain compared to other EU countries
• Key issue is whether Spanish regulation is protected by “standstill clause” allowing restrictions in place before joining EU
• Lawyers argue restriction was not enforced before 1986 and is contrary to EU law
• CJEU to determine if Spanish regulation violates EU legislation, potentially allowing companies to claim refunds for VAT paid in previous years
• CJEU decision could impact numerous pending claims in Spain.

Source: simmons-simmons.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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