The Spanish Tax Agency reverses a change in position applied de facto: U.S. entities may recover input VAT incurred in Spain by submitting an IRS certificate and a Resale Certificate

Supplementary report of the National Tax Management Office (Oficina Nacional de Gestión Tributaria) of April 28, 2026 (available here).

Starting in mid-2025, businesses and professionals established in the United States of America watched, with growing concern, an unexpected shift in Spanish administrative practice. The Spanish Tax Agency (AEAT) began systematically denying refund applications for input VAT (IVA) incurred in the Spanish VAT territory that had been filed by entities not established in the European Union under Article 119 bis of Law 37/1992 (the VAT Law, LIVA). The tax authorities argued that there is no tax analogous to VAT in the United States. Therefore, in their view, the documentary requirement laid down in Article 31 bis.1.d).3 of the VAT Regulations (RIVA) could not be met. That provision requires a certificate from the competent authorities of the State of establishment attesting that the applicant carries on business or professional activities subject to VAT or to an analogous tax.

What was truly striking about this episode was not so much the legal position adopted (debatable on the merits, as we shall see) but the way it was introduced. There was no information note, no published internal instruction, no prior binding ruling (consulta vinculante), no decision of the Tax Management Department setting out the reasons for the shift, no pronouncement of the Central Economic-Administrative Court (TEAC) to support it, and certainly no warning to the sector. Companies whose refund applications had for years been accepted without objection found themselves, overnight, facing systematic denials. These denials rested on a restrictive interpretation that the tax authorities had not bothered to publish or to justify through administrative doctrine. The resulting legal uncertainty was significant. The financial cost was immediate for entities that relied on the refund as a significant component of their Spanish cash flow.

On April 28, 2026, the National Tax Management Office (ONGT), after requesting a report from the Directorate General for Taxation (DGT), issued a supplementary report that reorients the tax authorities' position in terms substantially more favorable to the taxpayer. The correction is welcome, but it should be analyzed with two facts in mind. First, it came only after technical pressure from the professional sector, channeled institutionally through the Spanish Association of Tax Advisers (AEDAF). Second, it followed several months of applying a position that should never have been adopted in the way it was.

The legal framework at stake: Article 119 bis LIVA and Article 31 bis RIVA

The special regime for refunds of input VAT incurred by businesses or professionals not established in the Community, the Canary Islands, Ceuta, or Melilla is governed by Article 119 bis of Law 37/1992PDF, and its formal requirements are implemented by Article 31 bis of Royal Decree 1624/1992PDF. As a general rule, the statutory provision makes the refund conditional on compliance with the principle of reciprocity (point 2 of paragraph One). However, point 3 exempts from that requirement the supplies of goods and services expressly listed in the provision itself. These are essentially: patterns, molds, and equipment acquired or imported for use in manufacturing goods intended exclusively for export; access, accommodation, catering, and transport services linked to attendance at trade fairs, congresses, and exhibitions; and goods and services intended for carrying out transactions for which the recipient is the taxable person under the reverse-charge mechanism.

The dispute centered on point 3 of letter d) of paragraph 1 of Article 31 bis of the Regulations. That provision requires the application to be accompanied by a certificate issued by the competent authorities of the State of establishment attesting that the applicant carries on activities subject to VAT or to an analogous tax during the period to which the application relates. The AEAT interpreted this requirement in a literal and rigid manner, equating “analogous” with “identical.” It consequently required a certificate that does not and cannot exist in the United States, because the U.S. indirect taxation system is not built on a value added tax but on a state-level sales tax with a radically different structure.

What was wrong with the position applied between July 2025 and April 2026

Before setting out the new position, it is worth pausing briefly on why the previous one was legally untenable.

First, it conflated two requirements that the law treats as independent: reciprocity (point 2 of Article 119 bis.One) and documentary proof of status as a business or professional subject to an indirect tax (Article 31 bis.1.d).3 RIVA). The absence of reciprocity with the U.S. is a known and accepted fact, and that is precisely why the legislature provided for the exceptions in point 3. But it has nothing to do with how the applicant's business status is to be proven. The tax authorities were using the second requirement as an indirect route to render meaningless the exceptions to the lack of reciprocity that the legislature had expressly recognized.

Second, it equated “analogous” with “identical,” a reading of the regulatory term that does not withstand the most basic systematic analysis. Had the legislature wished to require a VAT, it would have said so. The choice of the adjective “analogous” reflects precisely the intention to cover indirect taxes of a different design, such as the Canadian, Australian, or New Zealand GST, the Japanese JCT, the Korean consumption tax, and even the U.S. sales tax itself. All of these share with VAT their nature as indirect taxes on consumption, even though their mechanics differ.

Third, it imposed on the taxpayer an impossible burden of proof (prueba diabólica). The tax authorities required a document that is simply not issued in the United States: no federal or state authority certifies “being subject to VAT or an analogous tax” in the terms used in Article 31 bis RIVA. Requiring the applicant to provide a certificate that is materially and legally impossible to obtain is contrary to the principle of proportionality and to the principle of effectiveness of the right to a refund. This has been repeatedly affirmed in the case law of the Court of Justice of the European Union (CJEU) in relation to the Thirteenth Directive (Directive 86/560/EEC, now recast), and it applies, mutatis mutandis, to the domestic refund regime for non-established businesses.

Fourth, from the standpoint of sound administrative practice, an interpretative change of this magnitude should have been implemented, at the very least, through a decision of the Tax Management Department or a published note or instruction. Such a document would have set out the reasons for the new position and allowed taxpayers to know the rules of the game. Applying a new position de facto to applications filed under the previous one infringes the principles of legal certainty, legitimate expectations, and good administration. This is all the more serious where the affected entities had organized their treasury on the assumption that their applications would be accepted. The tax authorities themselves are bound by those principles under constitutional and statutory mandate.

The new position: sales tax as an analogous tax and the documents required

Having received the report from the Directorate General for Taxation, the ONGT has adopted in its supplementary report a position that substantially rectifies its previous stance. Its practical implications deserve attention:

First, the report clearly confirms that U.S. entities are entitled to a refund of input VAT incurred in Spain, without having to prove reciprocity, in respect of the supplies of goods and services covered by point 3 of paragraph One of Article 119 bis LIVA. The absence of a VAT in the U.S. does not affect the statutory exception to reciprocity.

Second, in what constitutes the real doctrinal shift, the tax authorities abandon the restrictive interpretation that equated “analogous tax” with “tax identical to VAT.” The report accepts that the U.S. sales tax, although it differs from VAT in its mechanics for passing on and deducting the tax, seeks to tax the act of consumption by the final consumer and, through the resale certificate system, ensures neutrality for businesses or professionals that acquire goods or services in the course of their activity. This is the correct view, and it should have been the natural reading of the provision from the outset. The report consequently acknowledges that the sales tax operates as an indirect tax functionally equivalent to VAT for the purposes of Article 31 bis.1.d).3 of the Regulations.

Third, having accepted this functional equivalence, the report sets out a pragmatic solution to the material impossibility of obtaining a single certificate. That impossibility arises because the sales tax is exclusively a state tax, with no federal competence, and the IRS has no power to certify registration or compliance for sales tax purposes. Instead, the ONGT requires the joint submission of two documents:

1. The document or certificate issued by the IRS identifying the applicant as a federal income tax taxpayer and showing the code of the economic activity carried on during the period to which the application relates.
2. The Resale Certificate of one of the states in which the entity operates, evidencing its status as a business or professional registered for sales tax purposes (or, alternatively, where applicable, a Multijurisdiction Sales Certificate accepted by the relevant state).

In the tax authorities' view, the combination of both documents serves the evidentiary purpose of Article 31 bis.1.d).3 RIVA. That purpose is to prove that the applicant is a business or professional subject to an indirect tax in its country of establishment during the period in which the VAT amounts claimed for refund accrued.

Practical consequences and recommendations

In practice, the new position unblocks the Article 119 bis LIVA regime for U.S. entities that meet the substantive requirements for the refund and hold the appropriate documentation. Nevertheless, a few caveats should be borne in mind:

Reciprocity still does not exist between Spain and the U.S. as a general rule. U.S. entities will therefore only be able to recover input VAT incurred on transactions falling within one of the cases in point 3 of Article 119 bis.One LIVA. VAT incurred on other transactions remains unrecoverable through this route. Examples include accommodation or restaurant expenses not linked to attendance at trade fairs or congresses, and general acquisitions of goods and services for the business.

The Resale Certificate must correspond to a state in which the entity actually operates and must be valid during the period to which the refund application relates. It should also be anticipated that some states issue these certificates for limited periods and require periodic renewal. They will therefore need to be obtained before the application is filed and kept in a form that allows them to be produced in response to any information requests.

In practice, the IRS certificate referred to in the report can be obtained through Form 6166 (Certification of U.S. Tax Residency), which the IRS issues upon application via Form 8802 and payment of the corresponding fee. This document is traditionally used to apply double tax treaties (DTTs). Even so, its content serves the evidentiary purpose required by the ONGT: identifying the applicant as a federal income tax taxpayer and reflecting its economic activity.

Applications already denied while the restrictive position was being applied (essentially, those filed from summer 2025 onward) may, where appropriate, be challenged within the statutory time limits. The available remedies are an appeal for reconsideration (recurso de reposición) or an economic-administrative claim (reclamación económico-administrativa), relying on the ONGT's new position as a substantive ground for review. Likewise, entities that refrained from filing applications during this period may consider filing them within the time limit in Article 31 bis.4 RIVA (by September 30 of the year following the period to which the application relates). Those affected by the change of position who did not appeal in time should assess the available review procedures with their advisor, including, in particularly exceptional cases, ex officio review (revisión de oficio), given that the position was applied without any administrative publication.

A final reflection

This episode illustrates two things. The first is obvious: the tax authorities always retain the ability to review and rectify their own positions when technical analysis requires them to do so, and institutional dialogue with the professional sector is an effective way of correcting misguided interpretations. The second is less satisfactory: changes of position applied de facto, without prior publication, without public reasoning, and without warning to taxpayers, generate financial costs, procedural costs, and reputational costs that the tax authorities themselves should not be willing to bear. Legal certainty is not a rhetorical principle; it is an operational requirement of the tax system. When it is neglected, the first to suffer are always taxpayers acting in good faith.

At OC | Tax & Legal, we advise foreign companies, and U.S. groups in particular, on planning and managing their applications for refunds of input VAT incurred in Spain. We also defend them against administrative denials, ensuring that their documentation and procedure are properly aligned with the ONGT's new position and with the applicable Spanish and international legislation.