- The VAT treatment of sale and leaseback arrangements in Spain is contentious, with differing views on whether it is a VAT-able supply of goods or an exempt financial transaction.
- Spain’s Economic Administrative Central Court (TEAC) ruled that such arrangements are single financing agreements exempt from VAT, opposing the tax authorities’ view.
- The case involved a sale of property to a bank, a leaseback to the seller, and an option to repurchase, with VAT deductions challenged by tax authorities.
- TEAC relied on a 2019 CJEU decision, viewing leasebacks as single financial transactions for liquidity, not separate taxable transactions.
- TEAC’s decision diverged from tax authorities, who saw leasebacks as separate taxable sales and leases.
- TEAC emphasized EU VAT Directive and CJEU jurisprudence, stating leasebacks lack features of a supply of goods.
- The Supreme Court will hear an appeal to determine the correct VAT treatment of such arrangements.
Source: bdo.global
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.
