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Diario Euskadi

Bilbao Merchants Demand VAT Refund for Irregular Municipal Fees

A resolution from the Provincial Council of Bizkaia declares the collection of VAT from retailers illegal, potentially leading to millions in claims.

Generic image of a stack of old invoices or tax documents, symbolizing financial disputes and legal paperwork.
IA

Generic image of a stack of old invoices or tax documents, symbolizing financial disputes and legal paperwork.

Merchants in Bilbao are demanding the refund of VAT collected by the municipal company Bilbao Zerbitzuak on municipal fees since 2010, following a resolution by the Provincial Council of Bizkaia that declared the collection illegal.

Retailers at Bilbao's La Ribera Market have long complained about high rents. In 2022, they filed a complaint with Bilbao Zerbitzuak, the municipal company managing markets and cemeteries since 2010, and later with the Municipal Treasury Department, alleging that VAT was being unduly passed on to them. Now, the Provincial Economic-Administrative Court of Bizkaia (TEAF), an entity under the Provincial Council of Bizkaia, has accepted a claim from the merchants' association, which could pave the way for new, potentially multi-million euro lawsuits.
The businesses informed the provincial entity that Bilbao Zerbitzuak was charging them VAT on fees for the use of a communal space where they prepare 'online' orders. They specifically claimed for a February 2024 invoice totaling 552.06 euros, of which 95.81 euros corresponded to 21% VAT.
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"The VAT we have borne does not comply with the law. It is illegal."

a spokesperson for the merchants' association
The resolution, dated March 18, concludes that this concession is exempt from VAT and orders the invoice to be reissued without the tax. The implications of this ruling could be significant, potentially triggering an avalanche of individual claims. Merchants not only face VAT on the communal space fee but also pay 37.80 euros per square meter per month 'plus VAT', a surcharge applied since 2010, which, with the Provincial Council's decision, 'has been proven illegal'.
The merchants are scheduled to meet with their legal advisors to determine their next steps. They estimate that the amount unduly collected over these 16 years totals two million euros, plus interest. A spokesperson for the association is calling for the 'total refund' of this amount 'for political ethics', without the need for further court proceedings.
The municipal company Bilbao Zerbitzuak argued that, as a public business entity, it was not considered a Public Administration but rather an internal resource and technical service. However, according to the legal grounds of the provincial resolution, merchants should not be subject to VAT, as Bilbao Zerbitzuak performs functions typical of a Public Administration, and fees are exempt from VAT.

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