Doctrine by topic · DGT Observatory
How the DGT's position on this topic has evolved, and the rulings it rests on.
Current position
The deductibility of impairment losses on receivables from related parties requires that the debtor be in insolvency proceedings and that the judge has issued the order opening the liquidation phase. In the scope of VAT (IVA), the accrual of insolvency practitioner services occurs when the service is deemed completed according to insolvency regulations. Likewise, the reverse charge mechanism for the taxpayer in real estate transfers applies in all phases of the insolvency process, including the liquidation phase.
The DGT's position remains constant regarding the deductibility of receivables from related parties, always requiring the opening of the liquidation phase to overcome the prohibition in Article 13.1 LIS. Subsequent rulings have diversified the scope towards the accrual of VAT (IVA) on insolvency services and the application of the reverse charge mechanism for real estate within the process.
Turning points
Establishes that if foreign regulations do not contemplate an comparable liquidation phase, the impairment is not deductible until the accounting write-off due to uncollectibility.
Specifies that the accrual of tax in the agreement or liquidation phases occurs when the service is deemed completed in accordance with insolvency regulations.
Confirms the application of the reverse charge rule in real estate transfers during all phases of the insolvency process.
Analysis based on 12 of 12 rulings with a stated position. Updated 27 September 2026.