The judgment of 14 November 2022 of the Administrative Chamber of the Supreme Court addresses the issue of the accrual of VAT on services provided by insolvency administrators.
On 14 November 2022, the Contentious-Administrative Chamber of the Supreme Court handed down judgment 1476/2022, in appeal 1847/2021, in which it analyses the accrual of Value Added Tax on services provided by insolvency administrators.
The question raised was to determine whether the accrual of the VAT for the services provided by the insolvency administrators occurs at the end of each of the phases of the insolvency proceedings or, on the contrary, takes place when the insolvency proceedings end, on the understanding that the insolvency administrator then provides his services in a continuous and homogeneous manner throughout the insolvency proceedings, regardless of the different phases, providing a single service.
The High Court examines Article 75 of the law of VAT, with regard to the provision of services, together with different articles of the Insolvency Act, with regard to the individualisation of the different functions attributed to the insolvency administrators in each of the phases of the insolvency proceedings and, lastly, Royal Decree 1860/2004, of 6 September, which establishes the tariff of rights of the insolvency administrators, in order to be able to affirm that it is possible to individualise the different functions attributed to the insolvency administrators in each of the phases of the proceedings, the time of completion of each phase of the proceedings and the credit of the insolvency administrator that is due at the end of the common phase.
The answer given by the TS to the question is that the accrual of the VAT for the services rendered by the insolvency administrators occurs at the end of each of the phases of the insolvency proceedings.
This criterion has been reiterated by the Supreme Court in judgment 1501/2022 of 16 November 2022, appeal 2178/2022.
Both judgments can be found at the following links:Judgement No. 1476/2022 and Judgement No. 1501/2022.