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Bad Debts: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 66 rulings · 2014–2026

Current position

The modification of the tax base due to bad debts is appropriate when non-payment becomes definitive and the credit right is extinguished, requiring the accounting write-off and notification to the debtor. The rectification must be carried out within a maximum period of four years from the notification of the extinction or the reliable attempt thereof. For operations with a volume of less than 6,010,121.04 euros, the periods of six months or one year, depending on the nature of the credit, are maintained for its consideration as uncollectible.

The DGT's position remains stable regarding the temporality requirements and the need to prove insolvency. The doctrine has progressively specified the calculation periods according to the cash basis and the original classification of the operation. Recently, the possibility of applying the modification upon the definitive extinction of the credit right and the validity of insolvency proceedings in other Member States has been integrated.

Turning points

  1. V5178-26

    Establishes that the definitive extinction of the credit right and its accounting write-off allow for rectification within a period of four years from the notification to the debtor.

Analysis based on 61 of 66 rulings with a stated position. Updated 23 September 2026.

Rulings on this topic

24
V2539-24 10 Dec 2024

Requirements for VAT adjustment due to bad debts

SG de Impuestos sobre el Consumo
base imponiblecuotas repercutidascréditos incobrablesrectificación de cuotasdevengo LIVA — Ley 37/1992 del IVA art. 80.CuatroLIVA — Ley 37/1992 del IVA art. 89
Affects CompanyExpat · Non-residentIndividual

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