VAT on entertainment in Spain deductible

Representation and luxury are generally excluded in Spain

VAT on representation expenses, entertainment and luxury expenditure is generally not eligible for refund in Spain. Spain may, like any other EU Member State, apply the same exclusions to foreign entrepreneurs as it applies to its own entrepreneurs. And in Spanish VAT rules, representation expenses, entertainment and expenditure of a luxury nature generally fall under the items for which deduction is already limited or eliminated for domestic entrepreneurs. This carries through into the refund request of a Dutch entrepreneur: what a Spanish entrepreneur is not allowed to deduct themselves does not come back via the refund request either.

This does not mean that every expenditure in this area is immediately rejected. The classification is done per line on the receipt, not per receipt as a whole: a business meal during a trade fair may be assessed differently than a dinner without demonstrable business purpose, and transport or accommodation around an event falls under a different cost category than the entry costs themselves. Which expenditures exactly fall under "representation and entertainment" and which exceptions Spain allows within this vary by country — that is precisely why this cost category varies so widely in the comparison between EU countries.

This follows from Article 4 of Directive 2008/9 and the country list

Article 4 of Directive 2008/9/EC determines that a Member State of refund may apply the same u