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V2253-24 ·22 October 2024 ·consulta-vinculante Medium impact
Tax

Payment of legal costs does not trigger VAT or require an invoice for the payer

A query was raised regarding the validity of a pro forma invoice for legal costs for the purpose of deducting VAT and Income Tax. The DGT ruled that the payment of legal costs constitutes compensation and is not a transaction subject to VAT for the party making the payment.

In 6 key points

How it affects those involved

This ruling clarifies that legal costs awarded by a court are considered compensatory rather than a service fee, meaning the payer cannot deduct VAT and does not need to request a formal invoice from the losing party.

Lifecycle

2024-10-22PublishedPublished 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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