- The Spanish Supreme Court ruled that VAT deduction is not denied merely because costs are refactured at exact cost with no profit margin; a direct consideration/contraprestation is enough to make the transaction “onerous.”
- In the Porcelanosa A.I.E. case, the Court annulled the VAT assessment that had disallowed input VAT deductions on expenses later recharged to members at cost.
- The Court relied on CJEU case law and the VAT neutrality principle, rejecting the idea that onerosity requires an economic gain or margin.
- The AEAT had argued the input VAT was non-deductible because the expenses related to client hospitality and similar excluded items under Article 96 LIVA, but that position was overturned on the onerosity issue.
- The Court did not set binding jurisprudence because the State Attorney accepted the taxpayer’s position and did not fully contest the issue.
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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