Spanish Supreme Court Allows Input VAT Recovery on Costs Linked to Exempt or Non-Business Transactions

• The Spanish Supreme Court allows VAT recovery on costs related to exempt or non-business transactions if they benefit the company’s general activity.
• Input VAT on advisory services for expropriation procedures was deemed deductible due to its link to the company’s overall business.
• Such costs can be treated as general overheads, making the related VAT recoverable.
• The decision aligns with VAT neutrality principles and CJEU case-law.
• The judgment is binding on Tax Authorities, enabling businesses to use this criterion for VAT recovery in audits or litigation.

Source: dlapiper.com

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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