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V2526-21 ·8 October 2021 ·consulta-vinculante Medium impact
Tax

VAT paid on advance payments for investment goods is deductible

A company inquired whether VAT paid on advance payments for machinery can be treated as investment goods or if they must wait for the final invoice. The Directorate General for Taxes (DGT) ruled that each advance payment triggers its own tax liability and is deductible as an investment good.

In 6 key points

How it affects those involved

This ruling provides legal certainty for businesses, allowing them to deduct VAT on advance payments immediately rather than waiting for the final invoice, which improves cash flow.

Lifecycle

2021-10-08PublishedPublished 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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