- The Spanish Supreme Court held that VAT deductibility on recharged expenses between group entities does not require the recharging entity to earn a profit or economic margin.
- A recharge made strictly at cost can still be a taxable, “for consideration” supply for VAT purposes if there is a legal relationship and reciprocal obligations.
- The Court overturned the lower court’s denial of input VAT deduction, which had treated cost-only recharges by an Economic Interest Grouping as non-onerous.
- The ruling aligns Spanish VAT treatment with CJEU case law, including Hotel Scandic Gåsabäck and Lajvér Meliorációs Nonprofit Kft.
Source: simmons-simmons.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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