Denial of VAT Deduction for Abusive Practices Under EU Law and Anti-Abuse Principle

• The anti-abuse principle in EU VAT law allows denial of VAT deduction rights if abuse or fraud is detected, even without explicit national legislation.
• Spanish VAT law (Article 87.5, Law 37/1992) establishes subsidiary liability for recipients in goods deliveries, but not expressly for services.
• EU Court of Justice rulings (Italmoda, Cussens) confirm that VAT deduction, exemption, or refund can be denied if the taxpayer knew or should have known they were involved in VAT fraud.
• This position reiterates the TEAC resolution of March 22, 2022.

Source: serviciostelematicosext.hacienda.gob.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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