IVA incurred in EU countries

A little interesting fact about claiming IVA incurred on expenses in EU countries.

If during the past year your company sent an employee to work in another EU member country, eg you are a Real Estate office and you sent one of your employees to France to attend a large property exhibition, it is very likely that she would have incurred expenses for which IVA (VAT) was paid in the country in question. It is also probable that your company incurred costs in the initial booking of the event. For example:

  • Actual exhibition or conference costs, ie initial bookings, hiring of stands and equipment, etc.
  • Accommodation and restaurant costs.
  • Costs of cab or other public transport, car rental or meeting room hire.
  • Expenses for access to fairs where you go to exhibit, market etc. your products or services.

However, and this probably will not surprise you, your company cannot deduct this IVA on the usual IVA returns it submits in Spain.

What you need to do to recover this tax, is to submit a tax return, Modelo 360. This return (Modelo) must be completed and submitted on line.

Once submitted, the return is dealt with and the refund requested by, wait for it, the Spanish Tax Administration, they make this request on behalf of your company to the member EU country where the IVA was paid. Inevitably, these refunds take an age to come through but better late than never!

An important point to note; the deadline for requesting the IVA your company paid in 2019 is September 30th, 2020. Therefore, if this does apply to you, do not delay in making this request.

Thank you for reading this and stay safe and healthy in these continuing Covid-19 times.

Spence Clarke & Co specialises in the provision of Spanish tax, legal, audit and accountancy services, mainly to foreigners with interests in Spain. Our cross-border knowledge helps clients adapt to the Spanish system with the minimum of doubt and disruption. If you have any questions about this article or any other matter contact us, with no obligation, to see how we can help you.