TEAC Confirms Special Pro-Rata VAT Option Cannot Be Applied Retroactively Without Timely Election

• The TEAC ruled that the special pro-rata VAT regime cannot be applied retroactively if the taxpayer did not opt for it within the legal deadline after the 2013 regulation reform.
• The option for the special pro-rata is an irrevocable tax choice that must be exercised in time; otherwise, only the general pro-rata applies.
• In the reviewed case, a real estate developer failed to formally opt for the special pro-rata, so the AEAT’s regularization applying the general pro-rata was upheld.
• The inspection found the company carried out both VAT-taxable and VAT-exempt operations due to land expropriations, requiring the use of the general pro-rata for VAT deduction.
• The TEAC confirmed that, unless the special pro-rata is mandatory, late election is not allowed and the general pro-rata must be applied.

Source: allyon-etl.es

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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