- Spain’s Supreme Court held that tax authorities may verify VAT credit balances carried forward from periods that are already time-barred, if those balances are used in later open periods.
- Prescription bars reassessment of the original VAT period, but does not prevent review of the origin and amount of the VAT credit when it affects subsequent periods.
- If an offset balance is found incorrect, the authorities cannot assess tax or penalties for the prescribed period, but may reduce the remaining carryforward claimed in the non-prescribed period.
- This verification power is subject to the 10-year limit under Article 66 bis.2 of the General Tax Law.
- Businesses should keep evidence supporting carried-forward VAT balances, since expiry of the original period does not shield them from later review.
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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