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V1488-14 5 June 2014 · SG de Tributos Criterion in force
IVA · tributos incompatibles

Refund of undue payments may be requested if one tax is deemed inapplicable in preference to another

A taxpayer inquired about avoiding double taxation after paying VAT on a property. The Directorate General for Taxes (DGT) explained that, in cases of incompatible taxes, the right to a refund of the payments made under the inapplicable tax must be recognised.

The question raised

How should action be taken to avoid the double taxation of the transaction.

The DGT's ruling

In cases of incompatible taxes, once the applicable tax has been determined, the second assessment shall be annulled and the amounts paid shall be refunded. If the improper assessment is final, the debt for the applicable tax shall be extinguished through the refund of the amounts paid under the improper assessment. It is the responsibility of the managing Administration to determine whether the requirements for the refund of undue payments are met.

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