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V0392-14 14 February 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · condena en costas

VAT cannot be passed from the winning party to the losing party in a costs order

A query was raised regarding whether the winning party's solicitor and court agent can include VAT in the fee charged to the losing party following a costs order. The Directorate-General for Taxes (DGT) ruled that the payment of costs constitutes compensation and is not a VAT-taxable transaction between the winning and losing parties.

The question raised

Question posed: Legality of passing on the aforementioned fees to the losing party.

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