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V1048-20 24 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Fees paid on behalf of clients are excluded from the VAT taxable base if they meet disbursements requirements

A professional enquired whether DGT fees paid on behalf of clients should be included in the VAT taxable base of their services. The DGT ruled that they are not included if they meet the requirements for disbursements.

The question raised

Question raised: The taxpayer questions whether the aforementioned fees form part of the taxable base of Value Added Tax on the services that the professional charges to their clients.

The DGT's ruling

Sums paid on behalf of and for the account of the client, under express mandate, do not form part of the VAT taxable base. To be considered disbursements, four conditions must be met: 1) payment must be made on behalf of and for the account of the client with the invoice issued in the client's name; 2) an express mandate must exist; 3) the amount received must exactly match the expense; and 4) the intermediary may not deduct the tax levied on said expense. This criterion applies even if the professional does not hold the status of administrative manager.

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