Now that the tax obligations for the first quarter of the 2025 financial year are beginning, and bearing in mind that VAT expires on a quarterly basis, we consider it advisable to recall the possible actions carried out with the Tax Agency in order to recover the expired VAT.
To this end, it is important to emphasise that once the expiry period for recovering VAT established in Law 37/1992 has passed, there are possible actions that can be taken with the Tax Agency to avoid losing unsolicited VAT within the 4-year period. To do this, we must refer to the provisions of Ruling 1443/2013/00/00 of 22 September 2015, which is available in this article.
According to this ruling, when the right to request compensation for the outstanding VAT balance expires, the right to obtain a refund is established with a new limitation period of 4 years, in order to guarantee the neutrality of the tax.
Consequently, once the expiry period stipulated in Article 99 of the VAT Act has elapsed, during which the taxpayer has not been able to offset the excess payments and has not requested a refund, a credit entitlement arises in favour of the taxpayer, subject to the general limitation period for tax matters. In other words, after four years of not being able to offset the outstanding balance, we have another four years to request a refund.
In other words, the taxpayer has a right to the refund of VAT payments that could not be offset as a result of the passage of four years and, therefore, this right does not expire, as it would somehow result in unjust enrichment for the Administration.
It should be borne in mind that the VAT Law does not contemplate any specific procedure for applying this right, so the taxpayer must expressly address the tax authorities in writing requesting the refund of the VAT amounts for which the right to deduct by offsetting has expired.
If we want to analyse the Ruling, based on a simple and practical example, we would have the following:
A company that does not qualify for the monthly VAT refund scheme (REDEME), on 4t2025 could request the VAT generated from 4t2021 to that date (without exceeding the 4-year expiry period), but what would happen to the VAT for the period 1t to 3t of 2021 if that VAT was not requested in 4t2024? Have I already lost it? Well, no, with the Ruling cited in the article, a new possibility of an additional 4 years to recover said VAT is opened up to us.
The review of the expiry of VAT by quarters is always a procedure to be taken into account when we are closing a quarter, but taking into account Ruling 1443/2013/00/00 of 22 September 2015, other possible courses of action are opened up so as not to lose said VAT.
Once again, we at MDG are at your disposal to offer advice on the mechanism for recovering VAT credit.
Leticia Cayuela Mayor.