SpainManual

Value Added Tax in local language is "Impuesto sobre el Valor Añadido" (IVA)

Spanish VAT refunds

When a VAT return is in a repayable position, a VAT refund can only be requested in the December or Q4 VAT return (unless the business is in the Monthly Refund Scheme). Only those businesses registered in the Monthly Refund Scheme (so called REDEME) can request monthly VAT refunds. This scheme requires a number of additional compliance obligations.

At the bottom of the VAT return, there are sections that can be ticked to determine whether the VAT return is on a payable position ("a ingresar") or, in case the return is on a repayable position, VAT should be carried forward to the next period ("a compensar") repaid to the taxpayer ("solicitar devolucion"). In case of repayment, Spanish VAT refunds can be received in a foreign SEPA bank account. The IBAN number of this account must be included at the bottom of the VAT return form.

The Spanish authorities must reimburse the VAT within six months following the VAT refund request. An audit interrupts this six-month limit. In case VAT is refunded after the six-month period (even when an audit has been carried by the authorities), interest will be paid in addition to the VAT amount refunded.

Audits are not always carried when requesting a refund, however, these happen often for material amounts or significant changes in the VAT position.

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