The Spanish Supreme Court (judgment of 29 September 2025) reiterates its doctrine regarding the principle of full regularisation (“regularización íntegra”) in VAT matters.
The Supreme Court states that Tax Authorities must carry out a thorough evaluation of the taxpayer's VAT position during an audit (including limited audits). This includes identifying any incorrect input VAT deductions, as well as determining if the taxpayer is eligible to reclaim overpaid VAT, all within the same audit, without a separate refund application process having to be carried out.
The Court notes that this principle derives from both VAT and tax procedural law, and is intended to provide a thorough evaluation of the taxpayer’s situation, regardless of whether it results in an advantage or disadvantage for the Administration.
Key takeaway / recommendation
The judgment improves taxpayers rights by requiring Spanish Tax Authorities to apply the principle of full regularisation during VAT audits. If input VAT deduction is rejected, taxpayers should ensure that the authorities also assess their right to a refund for charged VAT within the same proceeding.
Reference / Link to document
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