Spanish bad debt relief changes

Spanish draft State’s Budget Law for 2023 includes a change on the bad debt relief rules making them more flexible.

27 October, 2022


Spain allows for VAT deduction of amounts paid to the tax authorities on invoices issued that were finally unpaid by the corresponding client. The conditions to deduct these amounts will be simplified starting 2023.

Spanish draft State’s Budget Law for 2023 includes a change on the bad debt relief rules making them more flexible from the supplier’s perspective.

Several modifications are introduced on the Spanish bad debt relief rules:

  • In case of bankruptcy declared in a different Member State, it is possible to deduct VAT on unpaid invoices issued to that client in that other Member State.
  • Where the customer is a private individual, the budget reduces the minimum amount to EUR 50 per transaction for claiming VAT on the bad debt.
  • Also, there will be more flexibility on the requirements for proving that the debt was requested to the customer. Where currently it is required a Court or Notary requirement, the proposed text indicates that it will be allowed to claim the debt by any reliable means of contact.
  • Finally, the deadline to recuperate the VAT credit is extended to 6 months since the bad debt is officially declared.

Check here more information about the current bad debt rules in Spain.

 


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