- Spain’s Supreme Court held that VAT deductibility depends on actual economic activity, not whether the activity is listed in a company’s corporate purpose.
- In the case, a company could deduct VAT linked to operating a marina berth for rent, even though that activity was outside its main business object.
- The Court said the VAT Law only requires the purchased goods or services to be directly and exclusively used for a business/professional activity.
- This overturns the tax authority’s and lower court’s view that a connection to the company’s object clause was necessary.
- The ruling matters for companies with secondary or ancillary activities, but a real economic activity and clear link between costs and taxable operations are still required.
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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