The Central Economic Administrative Court (TEAC) introduces a change of criterion favourable to the taxpayer, whereby the Administration must regularise the VAT payments unduly charged, and it is not necessary for the taxpayer to request an autonomous refund procedure
The new criterion of the TEAC contained in its Resolution of 20 October 2021 holds that, in application of the principle of full regularisation and good administration, the Tax Administration, within the framework of its actions, must carry out the necessary verification actions to determine whether the taxpayer is entitled to a refund of unduly charged VAT, and must regularise the situation with regard to VAT.
In this way, the TEAC applies the criterion of the Supreme Court contained in the ruling dated 26 May 2021 and the criterion maintained by the TEAC itself, among others, in rulings dated 26 February 2020 and 17 September 2020, is superseded.
In this way, the criterion contained in resolutions of 19 February 2015 and 14 December 2017, in which theright to full adjustment of unduly borne VAT is recognised, but within the inspection procedure, is taken up again. In accordance with the TEAC’s doctrine, the taxpayer cannot be required to resort to an autonomous refund application procedure for unduly charged VAT when the Administration, on the other hand, has regularised the input VAT.
Indeed, it must be the tax inspectorate itself, in accordance with the principle of full regularisation, which carries out the necessary verification actions to determine whether the taxpayer is entitled to a refund of the fully charged amounts, fully regularising the taxpayer’s situation ex officio.
This criterion is particularly favourable in cases such as the one analysed in the resolution, in which the taxpayer incorrectly applied the VAT reverse charge rule, since the regularisation carried out by the Administration consisted of settling the incorrectly deducted VAT quotas and, subsequently, the taxpayer had to claim a refund of the unduly charged VAT quotas.
This eliminates the cost, which was often very high, as the taxpayer had to pay the deductions claimed by the Administration and could not recover the Administration’s late refund of the VAT payments unduly made and paid until a considerable time had elapsed.
In the event that the taxpayer is involved in an inspection or verification procedure, it would be advisable to check whether the administration is applying the current criterion, otherwise it would be possible to demand that the taxpayer’s VAT situation be fully regularised.