New Spanish legislation creates US VAT Recovery Opportunity

 Posted by Sinead Usher

 Friday 27 February 2015

Reciprocity: a situation or relationship in which two people or groups agree to do something similar for each other, to allow each other to have the same rights, etc. : a reciprocal arrangement or relationship

Under the 13th VAT Directive, EU Member states were given provision to allow VAT reclaim by Non-EU countries.  Each EU country has a specific list of where an agreement is in place.  In return, there is a requirement that the Non-EU countries provide a similar advantage where consumption taxes (VAT/GST or sales tax) have been incurred by EU businesses. This is known as “reciprocity”.  Reciprocity is a predominantly positive arrangement, recognising the advantages in both countries for mutual trade.  In some instances, however, reciprocity is whereby the arrangement is NOT allowed.  For example, the US and Spain have, in the past, had a reciprocal arrangement preventing the reclaim of VAT/Sales Tax between the two.

New legislation in Spain has opened this up however in certain circumstances.  This is a very positive change and should be welcomed widely by US companies.


VAT refund for non-residents businesses, professionals or entrepreneurs (13th Directive).

No longer limited by reciprocity when applicable to:

i) Templates, moulds and equipment to be used for producing goods that will be finally (i) exported to the non-resident business, professional or entrepreneur or (ii) destroyed.

ii) Services consisting of access, accommodation, restaurant or transport linked to the attendance to fairs, congresses and exhibitions of a commercial or professional nature.


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Tagged: VAT Spain Refund
Streams: EU VAT Updates

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