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V0696-19 28 March 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Expenses paid in one's own name are not disbursements and must be included in the VAT taxable amount

A company inquired whether medical assistance expenses paid by it (even if on behalf of its parent company) could be treated as disbursements to avoid including them in its taxable base. The DGT ruled that, because the contract was made in its own name, the requirements for disbursements are not met and they must be included in the taxable amount. Furthermore, the entity must use the SII due to its volume of operations.

The question raised

Obligation to maintain Value Added Tax registry books through the Immediate Supply of Information (SII).

The DGT's ruling

For an expense to be considered a reimbursement and not form part of the taxable base, it must be paid on behalf of and for the account of the client, through an express mandate and with an amount that exactly matches the expense. If the taxable person contracts in their own name, even on behalf of a third party, the amount must be included in the taxable base. Furthermore, if the volume of operations exceeds 6,010,121.04 euros, the entity is obliged to comply with the Immediate Supply of Information (SII).

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