Supreme Court Upholds Exclusion of Reduction in VAT Base for Related Party Credits

The Supreme Court confirms the exclusion of reducing the taxable base in credits between related entities to prevent VAT fraud
A company sold a property to another related entity, including VAT, but the buyer went bankrupt in 2013
The seller requested a reduction in the taxable base for the unpaid part of the VAT, but it was denied by the tax authorities
The Supreme Court upheld the denial, citing the lack of evidence that the VAT was not paid and the relationship between the parties
The burden of proof for VAT payment lies with the taxpayer, and the exclusion of reducing the taxable base in transactions between related parties aims to prevent fraud
The Spanish legislation aligns with EU Directive 2006/112/EC in excluding the reduction of the taxable base in cases of partial or total non-payment to prevent fraud.

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.