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V2285-19 3 September 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Loan sale compensations exempt from VAT and require tax correction

A company asked whether a financial compensation for loan sales of assets exceeding the original value should be subject to VAT. The DGT states that such compensation is not a service provision but an indemnity, hence it is not subject to tax.

The question raised

Liability for Value Added Tax regarding said compensation and, where applicable, the rectification of the tax amounts initially charged.

The DGT's ruling

The payment of the compensation does not constitute a provision of services nor an act of consumption, but rather derives from the damages caused by the actions of the taxpayer when unilaterally changing the contractual conditions. As it is not consideration for management services, the amount is not subject to VAT. If an advance intended for fees is ultimately applied to this compensation, the provider must rectify the charged tax and refund the excess to the client.

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