Spain’s Central Economic-Administrative Court (TEAC) issued two decisions—one on the ability of taxpayers to obtain a refund of the plastic packaging tax (PPT) and the other on whether the output VAT payable to the Spanish tax authorities in relation to a fraudulent transaction should be deemed to be included in the consideration paid for the transaction.
One of the most controversial issues with the Spanish tax administration concerns the possibility for non-VAT-registered purchasers to request and obtain a refund of the PPT for products shipped outside the territory where the tax applies. A resolution released by the TEAC on 19 June 2025 provides some clarifications to the rules.
The special tax on non-reusable plastic packaging that became effective on 1 January 2023 aims to discourage the production and use of nonreusable and nonrecycled plastic. The PPT applies to packaging containing plastic, regardless of whether the packaging is empty or used to contain, protect, handle, distribute or display goods on the Spanish market. The taxable amount is the quantity (expressed in kilograms) of nonreusable plastic and the tax rate is EUR 0.45 per kilogram. The taxpayer of the PPT is the manufacturer, the importer into the EU or the acquirer of an intra-EU acquisition of the packaging, subject to some exemptions.
Most of the disputed cases involve companies that have borne the cost of the PPT by acquiring taxed products in the Spanish territory where the tax is applied and subsequently selling the products to non-established companies under conditions where the latter are responsible for transporting the goods outside the territory. These transactions are typically governed by Incoterms such as EXW, FOB or FCA and the tax authorities have been denying refunds to Spanish-based companies on the grounds that the refund should be requested by the non-established company.
In its resolution, the TEAC concluded that because the PPT law does not establish any requirement about who must assume responsibility for transportation in order to request a PPT refund, both the last seller in Spanish territory and the first customer outside Spanish territory may request the refund provided there is sufficient evidence of the shipment and payment of the tax. The TEAC reiterated that the authorities cannot add a requirement to the PPT law that is not explicitly stated therein.
It is important to remember that, in all cases, a refund request must be supported by evidence demonstrating—by any legally admissible means—that:
The TEAC released another resolution on 15 July 2025, in which the issue was whether the output VAT payable to the Spanish tax authorities in relation to a fraudulent transaction should be deemed to be included in the consideration paid for the transaction.
The case before the TEAC concerned a Spanish company that invoiced certain supplies as zero-rated intra-EU supplies. During a tax audit, the supplies were deemed to be taxable local supplies because the company had failed to provide the relevant proof of transportation within the EU and confirmation of receipt of the goods by the supposed EU recipients. The tax authorities took the position that Spanish VAT was not included in the consideration whereas the taxpayer argued otherwise, basing its position on previous decisions of the Court of Justice of the European Union (CJEU) (C-249/2012 and C-250/2012 of 7 November 2013).
Spain’s Supreme Court had previously ruled on this issue in which it followed CJEU case law and confirmed that VAT should be deemed to be included in the consideration if all of the following conditions were fulfilled:
The Spanish tax authorities based their conclusions (that VAT was not included in the consideration) in the instant case on a 2024 Supreme Court decision where the supplier had failed to apply the correct VAT rate for supplies made to private individuals. In that case, the Supreme Court deviated from CJEU case law and its own previous position by stating that such an approach applied to fraudulent cases but not when the VAT rate charged to individuals was incorrectly determined.
The TEAC tried to reconcile the Supreme Court approaches and ruled in favour of the Spanish company (i.e., that VAT was included in the consideration) because the 2024 Supreme Court decision was not applicable to the case at hand, given that fraud was deemed to be present and it was not possible to charge the applicable VAT to the recipients.
The TEAC resolution provides a level of comfort to VAT operators, but it also means that the determination of whether VAT should be deemed included in the consideration will need to be carefully analysed. Depending on why a supplier is unable to claim the VAT from the recipient (i.e., because the recipient is an individual or because the transaction is fraudulent), the VAT may become a financial cost for the supplier, i.e., where it is considered not included in the consideration paid by the recipient.
Ana Iglesias Querol
Verònica Targa
BDO in Spain
Plastic Packaging Tax Refunds
One of the most controversial issues with the Spanish tax administration concerns the possibility for non-VAT-registered purchasers to request and obtain a refund of the PPT for products shipped outside the territory where the tax applies. A resolution released by the TEAC on 19 June 2025 provides some clarifications to the rules.The special tax on non-reusable plastic packaging that became effective on 1 January 2023 aims to discourage the production and use of nonreusable and nonrecycled plastic. The PPT applies to packaging containing plastic, regardless of whether the packaging is empty or used to contain, protect, handle, distribute or display goods on the Spanish market. The taxable amount is the quantity (expressed in kilograms) of nonreusable plastic and the tax rate is EUR 0.45 per kilogram. The taxpayer of the PPT is the manufacturer, the importer into the EU or the acquirer of an intra-EU acquisition of the packaging, subject to some exemptions.
Most of the disputed cases involve companies that have borne the cost of the PPT by acquiring taxed products in the Spanish territory where the tax is applied and subsequently selling the products to non-established companies under conditions where the latter are responsible for transporting the goods outside the territory. These transactions are typically governed by Incoterms such as EXW, FOB or FCA and the tax authorities have been denying refunds to Spanish-based companies on the grounds that the refund should be requested by the non-established company.
In its resolution, the TEAC concluded that because the PPT law does not establish any requirement about who must assume responsibility for transportation in order to request a PPT refund, both the last seller in Spanish territory and the first customer outside Spanish territory may request the refund provided there is sufficient evidence of the shipment and payment of the tax. The TEAC reiterated that the authorities cannot add a requirement to the PPT law that is not explicitly stated therein.
It is important to remember that, in all cases, a refund request must be supported by evidence demonstrating—by any legally admissible means—that:
- The products are subject to the PPT and the tax has been paid;
- The PPT was not paid in the capacity of a taxpayer; and
- The products have been shipped outside the territory of application of the PPT.
VAT Correction of a Fraudulent Transaction
The TEAC released another resolution on 15 July 2025, in which the issue was whether the output VAT payable to the Spanish tax authorities in relation to a fraudulent transaction should be deemed to be included in the consideration paid for the transaction.The case before the TEAC concerned a Spanish company that invoiced certain supplies as zero-rated intra-EU supplies. During a tax audit, the supplies were deemed to be taxable local supplies because the company had failed to provide the relevant proof of transportation within the EU and confirmation of receipt of the goods by the supposed EU recipients. The tax authorities took the position that Spanish VAT was not included in the consideration whereas the taxpayer argued otherwise, basing its position on previous decisions of the Court of Justice of the European Union (CJEU) (C-249/2012 and C-250/2012 of 7 November 2013).
Spain’s Supreme Court had previously ruled on this issue in which it followed CJEU case law and confirmed that VAT should be deemed to be included in the consideration if all of the following conditions were fulfilled:
- The transaction subject to VAT was carried out in a fraudulent manner and VAT was not referred to in the documentation of the consideration;
- The taxable person with respect to the VAT accrued on the transaction is the person that made the supply and did not charge VAT; and
- The VAT legislation does not allow the taxable person to recover the VAT incurred on the transaction from the purchaser.
The Spanish tax authorities based their conclusions (that VAT was not included in the consideration) in the instant case on a 2024 Supreme Court decision where the supplier had failed to apply the correct VAT rate for supplies made to private individuals. In that case, the Supreme Court deviated from CJEU case law and its own previous position by stating that such an approach applied to fraudulent cases but not when the VAT rate charged to individuals was incorrectly determined.
The TEAC tried to reconcile the Supreme Court approaches and ruled in favour of the Spanish company (i.e., that VAT was included in the consideration) because the 2024 Supreme Court decision was not applicable to the case at hand, given that fraud was deemed to be present and it was not possible to charge the applicable VAT to the recipients.
BDO Insight
The TEAC resolution provides a level of comfort to VAT operators, but it also means that the determination of whether VAT should be deemed included in the consideration will need to be carefully analysed. Depending on why a supplier is unable to claim the VAT from the recipient (i.e., because the recipient is an individual or because the transaction is fraudulent), the VAT may become a financial cost for the supplier, i.e., where it is considered not included in the consideration paid by the recipient.Ana Iglesias Querol
Verònica Targa
BDO in Spain