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Spain Makes Bad Debt Relief Rules More Flexible

December 21, 2022

The bad debt relief rules in the Spanish State's Budget Law draft for 2023 have been revised to be more adaptable.


The VAT may be deducted from the amount paid to the tax authorities for unpaid bills in Spain. When 2023 rolls around, the requirements to deduct these sums will be loosened.


The bad debt relief regulations in the draft of the Spanish State's Budget Law for 2023 have been revised to be more accommodating from the supplier's standpoint.


Several changes are made to the Spanish bad debt relief regulations:


  • VAT on unpaid bills supplied to a customer in another Member State may be deducted in the event of bankruptcy in that Member State.

  • The minimum transaction value for claiming VAT on bad debt is reduced to EUR 50 if the client is a private person.

  • In addition, the conditions for showing that the consumer requested the debt will be more flexible. Where a court or notary is now necessary, the suggested wording emphasizes that any trustworthy method of communication may be used to collect the debt.

  • The period for recovering the VAT credit has been extended to six months from the day the bad debt was formally reported.

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