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V2006-24 19 September 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

Financial transactions with recipients in the UK entitle VAT deduction

An entity inquired whether its banking and financial transactions with entities in the UK entitled it to VAT deduction. The DGT ruled that, as the recipient is located outside the European Union, these transactions grant the right to deduction.

The question raised

Right to deduction for operations carried out under Value Added Tax.

The DGT's ruling

Banking or financial services that would be exempt in Spain entitle the provider to a deduction when the recipient is established outside the European Community. In this case, as the recipient is an entity in the United Kingdom, such operations are included in both the numerator and denominator of the pro rata calculation. This criterion is based on the objective of favoring the export of financial services by ensuring they are not subject to taxation within the Community territory.

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