- The limitation on the right to deduct VAT on representation expenses and client entertainment remains a recurring debate in Spanish tax administration.
- The controversy centers on the application of Article 96 of the Spanish VAT Law, especially regarding its compatibility with EU law and the standstill clause.
- The recent European Court of Justice (ECJ) ruling (March 12, 2026, case C-515/24, Randstad) clarifies the compatibility of Spanish exclusions on VAT deductions for entertainment and client expenses with EU law.
- The case involved Randstad Spain, which deducted VAT on event tickets and client entertainment, but the Spanish tax authority denied the deduction based on Article 96.
- The main issue was whether the simultaneous introduction of the VAT system and deduction exclusions in Spain is valid under the EU standstill clause.
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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