Client’s Situation
A company claimed VAT deductions related to services provided by external contractors. The Spanish Tax Authority (Hacienda) argued that: the supplier had been classified as “inactive,” the transactions were allegedly fictitious, the VAT deduction was therefore unlawful. The additional tax assessment amounted to €340,000.
Our Strategy
Demonstrated the genuine nature of the business transactions. Confirmed the actual performance of the contracted services. Provided documentary evidence of payments made. Relied on case law of the Court of Justice of the European Union (CJEU).
Result
The right to deduct VAT was fully restored. The principal tax assessment was cancelled. The client avoided a serious cash-flow crisis.
