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Newsletter Fiscal December 25

Tax Newsletter

December 25

Daniel Tarroja, Tax Partner
23/12/2025
Newsletter Fiscal December 25

Case law:

Value Added Tax (VAT)

  • Judgment of the General Court of the European Union of 26 November 2025. VAT.Exemptions.
    • The European Court of Justice is hearing case T-657/24, which concerns a request for a preliminary ruling from the Tax Arbitration Tribunal, Administrative Arbitration Centre (CAAD), Portugal. The preliminary questions raised and on which the TGUE must give an answer are, first, whether Article 135(1)(b) of the VAT Directive is applicable, with regard to the expression “credit negotiation”, to the provision of services for the acquisition of real estate credit customers for a credit institution by a taxable person, a tied credit intermediary, which is established and operates in accordance with the legal regime governing access to and exercise of the activity of credit intermediary, where those services involve cumulatively: a) proactively seeking potential mortgage customers through a real estate brokerage network (REMAX); b) making brochures provided by the bank containing financial information on mortgage products available to potential customers; c) assisting these potential clients in identifying the documentation necessary to request a credit proposal and in collecting and reviewing that documentation; d) the submission of the request for proposal to the bank; e) the receipt of the bank's responses; f) preparing comparative tables of the conditions offered by different banks and meeting with potential customers to analyse and clarify those conditions and other essential aspects of the financing (such as spreads, APR or debt-to-income ratio); g) communication of the bank's decision to potential clients; and h) a remuneration model based on a "success fee", in which the consideration is only payable when the credit agreements are actually concluded, depending on the volume of credit contracted/intermediated. Secondly, whether the classification of “credit negotiation” continues to apply even when the intermediary has no power to act on behalf of the bank, no influence whatsoever on the determination of the conditions set out in the brochures and credit proposals, and the potential purchaser of the credit is free to decide whether or not to take out the financing, as well as to choose the institution with which to sign the contract.
    • o The TGUE resolves the issue raised and declares that Article 135(1)(b) of the VAT Directive must be interpreted as meaning that the exemption it provides for credit negotiation transactions applies to the activities of a credit intermediary who seeks and attracts customers in order to offer them real estate credit agreements, assists them by performing acts prior to the conclusion of the contracts, is responsible for communicating with credit institutions and is remunerated by those institutions on the basis of the amount of the credit agreements concluded thanks to its intermediation, even though it is not authorised to act on behalf of credit institutions, has no influence on the content of credit offers, and customers remain free to decide whether or not to conclude a credit agreement and to choose the credit institution with which they will conclude the agreement.
  • Judgment of the General Court of the European Union of 3 December 2025.VAT. Chain sales and triangular operations.
    • The European Court of Justice is hearing case T-646/24, which concerns a request for a preliminary ruling from the Administrative Court of Slovenia. The preliminary questions raised and on which the TGUE must give an answer are, first, whether Article 141(c) of the VAT Directive, a provision on which the non-application of Article 41(1) of that Directive depends, in accordance with Articles 42 and 197 thereof, must be interpreted as meaning that the condition laid down therein is satisfied when the goods in question have been delivered, that is to say, made available or transferred to the purchaser (and not to the third party in the chain of transactions), who is identified for VAT purposes in the same Member State as the third party in the chain of transactions, by means of a single transport operation. Secondly, does the fact that the person invoking the simplification of triangular transactions is aware of the subsequent supply affect compliance with the requirement laid down in Article 141(c) of the VAT Directive? Thirdly, in the circumstances of the present case, must Article 41(1) of the VAT Directive be interpreted as meaning that VAT may be charged in the State of identification of the taxable person who is the second operator in the chain of transactions (Slovenia), given that, in such a context, the taxable amount is not reduced in accordance with Article 41(2) of the Directive if it is established that the taxable person knew or should have known that he was participating in transactions constituting an abuse of the VAT system.
    • The TGUE resolves the question raised and declares, first, that Article 141(c) of the VAT Directive, as amended by Council Directive 2010/45/EU, must be interpreted as meaning that the fact that the goods supplied in a triangular transaction are not physically transported to the person to whom the subsequent supply is made, but are transported to that person's customer, to whom that person resells them and who is identified for VAT purposes in the same Member State as the reseller, does not prevent the condition laid down in that provision from being regarded as fulfilled. Secondly, Article 141(c) of the VAT Directive, as amended by Directive 2010/45, must be interpreted as meaning that the fact that a trader who avails himself of the simplification measure provided for in respect of triangular transactions is aware that the goods in question are not physically transported to the person to whom the subsequent supply is made, but are transported to his customer, to whom that person resells them and who is identified for VAT purposes in the same Member State as the reseller, does not affect compliance with the requirement laid down in that provision. Thirdly, Articles 41 and 42 of the VAT Directive, as amended by Directive 2010/45, must be interpreted as meaning that it is for the authorities and courts of the Member State which issued the VAT identification number under which the VAT-registered purchaser made an intra-Community acquisition of goods to refuse that purchaser the benefit of the arrangements provided for in Articles Articles 42 and 141 of that directive and the reduction in the taxable amount provided for in the second paragraph of Article 41 of that directive, if it is established that that purchaser knew or should have known that, by means of the transaction relied on to justify the application of that scheme, he was participating in VAT fraud committed in the context of a chain of supplies.
  • Judgment of the Court of Justice of the European Union of 11 December 2025. VAT. Joint and several liability.
    • The European Court of Justice is hearing Case C-121/24, which concerns a request for a preliminary ruling from the Administrative Court of Veliko Tarnovo, Bulgaria. The preliminary questions raised and on which the CJEU must give an answer are, first, whether recital 44 and Article 205 of the VAT Directive and the principles of transparency and proportionality of liability allow proceedings to be brought to determine joint and several liability for VAT debts and the amount of joint and several liability, once the principal debtor has ceased to exist as a legal entity. Secondly, if the aforementioned provisions are opposed, following the deletion of the debtor from the Commercial Register without succession to their rights and obligations, to the existence of a certified claim against that person, for which a third party will be liable in the future. Thirdly, whether the described administrative practice of the tax authorities is in accordance with the principle of legal certainty.
    • The CJEU rules on the questions raised jointly and declares that Article 205 of the VAT Directive, in light of the principles of proportionality and legal certainty, must be interpreted as not precluding national legislation under which the liability of a person jointly and severally liable for the payment of VAT, within the meaning of Article 205, may be enforced after the person liable for that tax has ceased to exist as a legal entity, if it is established that that person, at the time when he exercised his own right to deduct, knew or should have known that the person liable for the tax would not pay it.
Personal Income Tax (PIT)
  • Supreme Court ruling of 27 November 2025. Personal income tax. Unjustified capital gains.
    • The Supreme Court rules on appeal number 5514/2023, lodged against the judgment handed down by the High Court of Justice of the Valencian Community, which partially upheld the contentious-administrative appeal in relation to the settlement agreement and the imposition of a penalty in relation to personal income tax for the 2012 and 2013 financial years. The question raised and on which the Supreme Court must respond is whether, in order to invalidate the classification of an unjustified capital gain in personal income tax, it is sufficient for the taxpayer to prove the origin of the assets—that is, to identify the source and the person from whom they were received—or whether it is also necessary to prove the business or legal title from which they originate.
    • The Supreme Court declares the appeal admissible and, establishing the following interpretative criteria, determines that in order to refute the classification of a capital gain as unjustified under the terms of Article 39 of the Personal Income Tax Law, the taxpayer must prove the origin or source of the assets, that is, (i) where they come from by identifying the means of transfer of the assets or rights, (ii) from whom they come by identifying the person transferring them, and (iii) why they are transferred by proving the legal transaction by which the ownership of the assets and rights that alter the composition of the assets is transferred.
Other decisions of interest:
  • Supreme Court ruling of 24 November 2025. LGT. Sanctioning.
    • The Supreme Court rules on appeal number 5958/2023, lodged against the judgment handed down by the National High Court, which dismissed the contentious-administrative appeal filed against the TEAC's decision in relation to the penalty agreement for the commission of a very serious tax offence, consisting of the issuance of invoices with false or falsified data in the 2008 and 2009 financial years. The question raised and on which the Supreme Court must give an answer is to determine what legal effects it has and, in particular, whether it constitutes grounds for invalidating the penalty decision in tax matters, the fact that the investigating body or, where applicable, the body competent to impose the penalty, has disregarded the request for certain exculpatory evidence made in a timely manner by the interested party in the proceedings, without justifying or giving reasons for the rejection or refusal of its use. In particular, specify whether the penalty imposed, completely disregarding any evidence that could have been provided by the defendant and assessed by the sanctioning body, violates the fundamental right to the presumption of innocence.
    • The Supreme Court declares the appeal admissible and, establishing the following interpretative criteria, determines that, firstly, the fact that the body competent to impose a tax penalty does not expressly rule on the request for exculpatory evidence, timely sought by the interested party in the proceedings, constitutes grounds for invalidating the penalty decision in tax matters, without justifying or giving reasons for the rejection or refusal of such evidence. Secondly, the penalty imposed in this manner, completely disregarding any exculpatory evidence that could have been assessed by the sanctioning body, violates the fundamental right to use relevant evidence for the defence and, in relation to that right, the presumption of innocence (Article 24.2 of the Spanish Constitution). Thirdly, given the nature of the infringements observed and verified as violating the aforementioned rights and freedoms protected by the Constitution, the penalty thus adopted is null and void (Art. 217.1.a) LGT) and, for this reason, cannot be rectified or validated in subsequent proceedings or processes.

Administrative legal commentary:

Value Added Tax (VAT)

  • Binding Consultation V0969-25 of 5 June 2025. VAT. Place of performance.
    • The consultant, established in the territory where the tax applies, provides jewellery and costume jewellery design services for a single client, a company established in China. The consultation raised concerns the place where the services described are performed and, given that the aforementioned company is its sole customer, confirmation that it is not obliged to charge VAT on any of the invoices it issues.
    • The DGT responds to the query raised and, based on Articles 69 and 70 of the VAT Law, determines that the provision of services subject to the query, whose recipient is a business owner or professional acting as such who does not have their place of business in the territory where the tax applies (TAI), nor does they have a permanent establishment (EP) there, is not considered to have been provided in the TAI and will not be subject to VAT, therefore VAT should not be included in the invoice documenting the service. If the recipient of the services provided by the consultant had a permanent establishment in the TAI, and the services described were intended for that establishment, they would be deemed to have been provided in that territory and would therefore be subject to VAT.