Getting a reimbursement on Spanish VAT is so problematic that businesses often give up trying to claim their refunds. Costs on mooring docks, refits or fuel are sometimes 21% more expensive for foreign businesses. But these problems arise from wrong advice on Spanish VAT rules.
The first step is to ensure that you hold a valid invoice that has been correctly issued. From our experience, some Spanish suppliers may charge VAT incorrectly. Also incorrect or incomplete details may be included on the invoice (eg. the client´s VAT number is not stated despite the obligation to do so in all invoices). As a client, you should check with Marosa or your local VAT specialist to make sure that these requirements are met. Do this before the invoice is issued to avoid long discussions with the supplier.
Once you hold a valid invoice, it is paramount that you make your application via the correct procedure. If you are an EU business and did not have to register for Spanish VAT (see our earlier issue on VAT on chartering activities), you should apply using the mechanism of Directive 2008/09/EC (so called ´8th Directive´). If you are required to register in Spain, for example, because you had chartering activities in the country, you should claim your VAT back via your VAT return.
From our experience, the first questions of the Spanish authorities about your refund will focus on the procedure used in your application (8th Directive or VAT return). It is very important to understand and choose the right procedure to avoid these refunds being rejected on the first review.
Timing is also important. If you had chartering activities in the country, you can claim VAT back on all invoices received since the start of your activities (with a limit of four years). If you did not have activities, your refund application must be submitted before September 30th of the following year. We see an opportunity on all businesses who have Spanish VAT unclaimed from the past, as we may be able to recover all VAT from last four years.
How can we help you?
Marosa is VAT firm specialized in the yacht and maritime industry in Europe. Our focus is VAT recovery and VAT compliance. Our VAT recovery services are only billed on a success fee basis, so that our work is free of charge unless we are successful.