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V0999-16 ·14 March 2016 ·consulta-vinculante Medium impact
Tax

Payment of legal costs is not subject to VAT and its deductibility for Income Tax depends on its link to economic activity

A query was made regarding the tax implications of a court order for legal costs. The DGT has determined that the payment of legal costs constitutes compensation and is not subject to VAT. Furthermore, its deductibility for Income Tax purposes depends on whether the expense is linked to the economic activity or constitutes a capital loss.

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2016-03-14PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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