The Central Economic-Administrative Court establishes that it is not enough to issue a corrective invoice: proof of its receipt by the client must be provided. Without this proof, the Tax Agency may reject the VAT refund.
The Tax Agency is tightening control over VAT refunds requested by freelancers and small businesses. A recent ruling from the Central Economic-Administrative Court (TEAC) establishes that it is no longer sufficient to issue a corrective invoice to modify the taxable base of the tax. The taxpayer must retain documentary evidence of the dispatch and that the client received it.
The ruling follows the criteria of the Supreme Court and particularly affects cases of bad debts or clients in bankruptcy, as outlined in Article 80 of the VAT Law. If the freelancer cannot prove receipt, the Tax Agency will reject the modification and block the recovery of VAT.
What changes with the new TEAC ruling
Until now, many freelancers and SMEs would issue the corrective invoice and consider it valid without further action. The TEAC clarifies that this step is not enough: the recipient must have received it for them to correct their own VAT deductions. The aim is to ensure tax neutrality.
Tax experts recommend applying this procedure to any corrective invoice, regardless of the reason. This helps avoid problems in future tax audits. The lack of valid proof can have a significant economic impact on the business.
For example, an invoice of 10,000 euros plus 2,100 euros of VAT could result in the loss of the right to recover those 2,100 euros if there is insufficient evidence of dispatch. When it affects multiple transactions, the economic damage can be considerable and impact the business's solvency.
What documents freelancers and SMEs should retain
The regulations do not require the use of a specific medium. A registered fax is not essential, as long as there is other evidence that can demonstrate both the dispatch and receipt. Emails with acknowledgment of receipt, tracked messaging, or any other reliable evidence are acceptable.
What is important is that the Tax Agency can verify that the client received the correction. If the taxpayer does not provide this proof, the Tax Agency will maintain the initially charged VAT, even if the transaction has been cancelled or the amount has never been collected.
“The ruling reinforces the need to retain documentary evidence of the dispatch of these invoices. If the taxpayer cannot prove that the client received the correction, the Tax Agency may reject the modification of the taxable base,” sources from the TEAC state.
For freelancers and SMEs, this represents a change in habit: it is not enough to issue the corrective invoice and file it away. It is necessary to keep the proof of dispatch and the confirmation of receipt. Those who already did so will be better prepared for any potential inspection.
The TEAC ruling is firm and is already in effect. Tax advisors recommend reviewing internal procedures to include this additional step. They also suggest digitising the proofs and keeping them accessible during the legal VAT prescription period (four years).
For readers interested in the topic, the key lies in prevention: establish a dispatch system with acknowledgment of receipt and retain all documentation. This avoids the risk that a lack of proof undermines the recovery of VAT, with the consequent economic detriment.
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