The tax amounts paid must be considered legally deductible

At this point, three circumstances must be taken into account:

1. The contributions accrued in the territory of application of the Spanish VAT (Peninsula and Balearic Islands) are deductible, borne by direct impact that correspond to subject and non-exempt operations.

   Example:

   The VAT contributions borne by a businessman in a country other than Spain are not deductible in our country because they have not been accrued in the territory of application of the tax. To recover these fees, the entrepreneur must go to the tax authorities of the country in which they were incurred. If the business is a member state of the European Community, it is necessary to submit the form available for this purpose on the Tax Agency's website. In this case, the Member State concerned will be obliged to repay the contributions incurred in accordance with the provisions contained in Community legislation. If it is a non-EU country, its internal regulations will have to be followed.

2. The contributions cannot be deducted in an amount greater than that legally applicable.

   Example:

   A publisher sells books for 10,000 euros to a bookseller, passing on 2,100 euros of VAT (therefore a 21 percent tax rate applies). Books should be taxed at 4 percent, according to the law.

   Even if the bookseller has paid the 2,100 euros, he will only be entitled to deduct 4 percent, that is, 400 euros. This is without prejudice to the obligation on the part of the editor to rectify any erroneous impact made.

3. Contributions cannot be deducted before they have been accrued in accordance with the law (see section Accrual in chapter 4 of this Practical Manual).