Bad debt in Spain is possible, but a large number of requirements make it difficult in practice. Recovering VAT from the authorities when these amounts have not been collected from your customer is only allowed where the customer is officially bankrupted or where 12 months have passed since the tax point. In these cases, a credit note must be issued within one month after the bankruptcy or 3 months after the 12 month period. In addition, a specific corrective return must be submitted informing the tax authorities about the claim. This form is due within one month following the issuance of the credit note. Bad debt is never possible where the customer is not established in Spain.