Spanish Value Added Tax Law - V.A.T.

By Law 37 of 28th December 1992, published in the Official Gazette of 29th December 1992, Spain enacted new provisions regarding Value Added Tax. New V.A.T. legislation is introduced aimed at achieving fiscal harmonization among European Union countries with respect to fulfilling the aim of an Internal Market.

COMMENT

The law analyzed herein addresses the need to adapt indirect taxation to the new situation arising from the establishment of an Internal Market among the European Union countries. The said adaptation involved the adopting of a series of measures which would give identical treatment to all internal transactions and to all intra-Community operations, which would lead to the total disappearance of customs controls among community countries. The two measures were the payment of the tax at source and the total harmonization of tax rates. Nevertheless, practical difficulties made it advisable for the first measure to be postponed while the harmonization of tax rates