The Supreme Court analyzes the deductibility of VAT payments incurred in the acquisition of goods or services within the framework of non-subject or subject or exempt operations, when such goods or services have provided an economic benefit that favors the general activity.
The Supreme Court has issued, on December 20, 2022, ruling 1695/2022, in cassation appeal number 1399/2021, in which it establishes doctrine in relation to the deduction of VAT payments supported.
The question that presented objective cassational interest for the formation of jurisprudence consisted of "[…] Determine whether the deduction of the VAT payments borne by a commercial entity in the acquisition of goods or services within the framework of non-subject or subject and exempt operations, when such goods or services have provided an economic benefit that favors the general activity […]".
The conclusion reached by the Supreme Court establishes the following jurisprudence in response to the question with cassational interest:
"a) The deduction of VAT contributions borne by a commercial entity in the acquisition of goods or services within the framework of non-subject or subject and exempt operations is appropriate, when such goods or services have provided an economic benefit that favors general activity.
b) In particular, in this case it is the deduction of the VAT paid for the provision of advisory services in an expropriation procedure with the purpose of achieving a greater fair price than that initially recognized by the Administration, taking into account the nature of the expropriated property and its direct relationship with the company's own activity.
c) There is a right to this deduction of the input VAT when the good delivered or the service received to which it gives rise is related to or represents a general benefit for the taxable person, although the activity to which it relates directs is exempt or not subject, provided that, in addition to this general benefit, here undoubted, the operations in which the person claiming the deduction is engaged, within the framework of their economic activity constitute taxed operations, which in this case has not been disputed. "
This is, moreover, the most respectful solution with the principle of fiscal neutrality, by virtue of which, the taxable person must be exempt from tax expenses in the form of VAT due to the receipt of services provided by third parties that benefit their general economic activity subject, as a whole, to the harmonized tax that concerns us.
You can consult this ruling at the following link: STS 4923/2022 of 12/22/22 .