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V0274-19 12 February 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción

Whether VAT is included in the price depends on the agreement between parties; a contract does not replace an invoice

A company enquired whether VAT was included in the price of a radio licence without an express invoice, and whether it could deduct the tax amount using a contract witnessed by a public official. The DGT ruled that the inclusion of the tax depends on private agreements and that a contract is not a valid supporting document for tax deduction.

The question raised

Question posed: Whether the corresponding Value Added Tax amount should be understood as included in the agreed price. If applicable, whether the tax amount borne by the applicant would be deductible, given that the transaction is documented in a document executed by a public official.

The DGT's ruling

In the private sphere, the inclusion of VAT in the price must be determined according to the agreement between the parties. The contract executed by a public official does not meet the content requirements of the Invoicing Regulations; therefore, it is not considered a supporting document for the deduction of the tax, nor does it substitute the obligation to issue an invoice.

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