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V0553-17 2 March 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Bank chargeback fees are not subject to VAT as they are compensatory in nature

A company has requested clarification on whether it must charge VAT on fees collected from customers when a direct debit is returned. The DGT has ruled that these amounts do not constitute consideration for a service, but rather compensation which does not constitute a consumption act.

The question raised

Treatment of said amounts in Value Added Tax.

The DGT's ruling

The amounts received for expenses related to unpaid returned direct debits are compensatory in nature and do not constitute consideration for a transaction subject to VAT. As there is no act of consumption nor a provision of services, the entity must not charge tax on such collection.

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