- Reciprocity Requirement in VAT Refunds: Non-EU businesses applying for Spanish VAT refunds via form 361 face challenges due to the strict reciprocity requirement mandated by article 119bis of the Spanish VAT Act, which necessitates a formal resolution from the Directorate General of Taxes (DGT) confirming that the applicant’s country offers equivalent VAT refund rights to Spanish businesses.
- Practical Implications of the Requirement: The current interpretation leads to difficulties for non-EU businesses, as many applications are denied due to the absence of a DGT resolution. This situation necessitates proactive documentation of reciprocity from applicants and highlights the sluggishness of the Spanish tax administration in issuing these resolutions.
- Call for Flexible Interpretation: There is an argument for a more flexible interpretation of the reciprocity requirement that would allow non-EU businesses to provide evidence of reciprocity themselves rather than being solely reliant on a DGT resolution. This aligns with the principles of the 13th Directive, which aims to ensure equitable treatment between EU and non-EU businesses regarding VAT refunds, and emphasizes the need for a substantive rather than overly formalistic approach in administrative practices.
Source ivaconsulta
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