Recovering input VAT in Spain can be a significant opportunity for Swiss companies operating internationally. Many businesses incur Spanish VAT on services, imports or events and never recover it or they face major difficulties and delays. At VAT Green Tax, we regularly assist non-EU companies in recovering VAT efficiently and within optimal timeframes.
Swiss companies are eligible under the 13th Directive thanks to a reciprocity agreement between Switzerland and Spain. However, the process is more complex than for EU businesses and is strictly regulated under article 119 bis of the Spanish VAT Law.
How Swiss companies can recover input VAT in Spain.
Swiss companies can recover Spanish VAT if they are not established in Spain and do not carry out taxable transactions locally which means they have to submit VAT returns. The refund must be requested directly from the Spanish tax authorities (AEAT), following a formal procedure with specific documentation and strict deadlines.
One of the most critical aspects is timing. Applications must be submitted before 30 September of the year following the one in which the VAT was incurred. This deadline is strict and missing it means losing the right to recover the VAT. It is possibe to submit quarterly refunds to improve cash flow.
The Spanish tax authorities carefully review each application. It is not a simple administrative process. The AEAT typically analyses invoices, business activity and the nature of the expenses in detail. Any inconsistency can lead to delays, additional requests or even rejection.
When properly managed, the refund process can be completed in approximately 4 to 6 months.
Requirements for Swiss VAT refund in Spain
To apply, companies must provide:
- VAT taxpayer certified issued by Swiss authorities.
- Invoices fully compliant with Spanish VAT requirements.
- Documentation proving that expenses are linked to business activities.
- Appointment a Spanish representantive, such as VAT & GREEN TAX.
It is possible to recover VAT on a wide range of business-related expenses. This includes import VAT, services located in Spain, access to trade fairs and events, and the purchase of goods that are later sold applying the reverse charge mechanism. Accommodation costs such as hotels are also generally recoverable.
However, some expenses may be subject to limitations. Restaurant and entertainment costs, for example, can be restricted depending on their nature and justification. A detailed review of each expense is essential before submitting the application.
A key success factor is ensuring that invoices are correct from the beginning. Many applications are delayed or rejected due to formal errors, incorrect supplier details or lack of sufficient justification.
Practical case: Swiss company importing goods and selling to a Spanish subsidiary.
At VAT & GREEN TAX, we normally advise Swiss companies on VAT recovery. Particularly, a common cases involves Swiss companies importing goods into Spain and subsequently selling them to a Spanish subsidiary. In this structure, the Swiss company pays import VAT at customs, often representing a significant cash outflow.
However, the subsequent sale to the Spanish entity is typically carried out under the reverse charge mechanism. This means that the Spanish subsidiary accounts for VAT, and the Swiss company does not charge Spanish VAT on its invoice.
As a result:
- The Swiss company bears VAT at import.
- It does not collect VAT on sales
- It is not required to register for VAT in Spain
This creates a recurring VAT credit position that must be recovered through the refund procedure under article 119 bis.
In these cases, managing the refund process correctly is essential. The Spanish tax authorities often review the structure in detail to ensure that there is no obligation to register for VAT and that the reverse charge has been properly applied.
VAT & GREEN TAX´s approach.
Given the level of assesment applied by the Spanish tax authorities, a structured and well-prepared application is essential. At VAT Green Tax, we provide a fully managed service covering the entire process, from initial assessment to final refund.
For clients operating under this structure, we typically provide quarterly support including:
- Review of documentation and supporting invoices.
- Preparation and submission of the VAT refund application.
- Response to any requests or audits from the Spanish tax authorities.
- Coordination of the refund process and follow-up with the administration.
Our approach ensures that the process is handled efficiently and reduces the risk of rejection. We maintain a very high success rate by anticipating potential issues and addressing them before submission.
In practice, when the process is properly managed, funds are usually received within 4 to 6 months from the moment the VAT is incurred.
FAQs
Do Swiss companies need to register for VAT in Spain to recover VAT?
No, the VAT registration does not depend on the Input VAT but on the transactions carried out in Spain.
Can import VAT always be recovered?
In principle, yes, as long as the expenses are linked to business activities and all formal requirements are met.
What is the deadline to apply for the refund?
The application must be submitted before 30 September of the year following the one in which the VAT was incurred. This deadline is strict.
How long does the refund process take?
Typically between 4 and 6 months, depending on the complexity of the case and whether the tax authorities request additional information.
Can the Spanish tax authorities request additional information?
Yes, the AEAT frequently reviews applications in detail and may request clarifications or additional documentation.
What are the most common issues on VAT recovery?
Errors in invoices, incorrect documentation or inconsistencies in the business model are common reasons for delays or rejections.
