Corrective Invoices: The Term for VAT Refund to Non-Residents in Spain

Published on 24 May 2021

In Spanish VAT, there are two main systems for refunds: one for business owners established in Spain and another for non-residents. The latter is drastically different from the refund method regulated for business owners with establishments in Spain; this article, however, will focus exclusively on the deadline for requesting said refund.

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According to the regulations on VAT, the term for submitting a request for a refund of the tax begins on the day after the end of each quarter or of each calendar year and ends on 30 September of the following year. In contrast to the system for business owners established in VAT territory, whose term is four years, there are much stricter deadlines for non-residents. It must be noted that this deadline is an expiry date and, as such, requests submitted after the deadline will not be admitted.

Given such short deadlines, in practice there is a debate regarding when calculation of the term begins if the invoice received by the non-resident business owner is incorrect and must be corrected. This case has been analysed by the central Economic Court, which determined the following as doctrine: (i) if the original invoice is incorrect, but its defects are such that they allow for the deduction of VAT, it shall be counted from the date of the invoice; (ii) nevertheless, if the original invoice is incorrect and such errors do not allow the deduction of VAT, it is mandatory to request the corrective invoice from the vendor or service provider and it will be as of the date of such new invoice that the period for requesting VAT will be calculated.

It should be warned that, in our experience, it is very common in sales or services rendered to non-residents, invoices have some type of error. If a request is made with these invoices incorrect, said request will most likely be denied. Many business owners decide to appeal the tax authorities’ decisions, even before the courts, which many times is unfruitful. What should be done in these cases is to request that the supplier correct the invoice and initiate a new request procedure, with the corrected and complete invoice. This will lead to a successful outcome.