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V2715-14 10 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Reduction of taxable base not permitted due to UTE insolvency, but allowed for bad debts if requirements are met

A company enquired whether it could adjust its VAT taxable base following the declaration of insolvency of one of the companies forming a Temporary Joint Venture (UTE) that received its services. The DGT ruled that a reduction is not applicable due to the UTE's insolvency proceedings, but a reduction for bad debts may be applied if all legal requirements are satisfied.

The question raised

Applicability of the modification of the VAT tax base.

The DGT's ruling

The modification of the tax base due to insolvency proceedings (Art. 80.Three LIVA) is not applicable when the recipient is a Joint Venture (UTE), as it lacks legal personality and cannot be declared insolvent. However, if the credits remain unpaid by the Joint Venture, the reduction for uncollectible credits (Art. 80.Four LIVA) may be applied provided that the requirements regarding timing, registration, and collection claims are met.

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