1E9Ct5D

established in a country with which instruments of mutual assistance exist.Deduction of Input Value Added TaxVAT payers are generally entitled to deduct from the amounts of VAT charged on taxabletransactions carried out by them the amounts of tax borne, insofar as the goods and servicesacquired are used by them to perform the following transactions:1 Supplies of goods and services subject to and not exempt from VAT;2 Transactions that, although exempted, relate to international trade (exports or intra-EUsupplies); and3 Transactions performed outside the Spanish VAT territory that would have given rise tothe right to deduct had they been performed within the territory.The right to deduct also is conditional upon formal requirements, and it may be exercised in aperiod of four years.RefundsWhere the VAT charged exceeds the deductible VAT borne, the VAT payer must pay thedifference through its periodic monthly or quarterly returns.If, at the end of the year, the amount of deductible VAT borne exceeds the amount of VATcharged, the VAT payer is entitled to a refund which, in general, can only be requested throughthe last return of the year. Such refund must be obtained, in general, within the six monthsfollowing the deadline for filing the last return of the year (January 30). Special rules apply toVAT borne in Spain by non-established traders.Inheritance and Gift TaxInheritance and gift tax applies to Spanish resident heirs, beneficiaries and donees and is chargedon all assets received (located in Spain or abroad).Non-resident beneficiaries also are subject to this tax as non-resident taxpayers and must pay thetax in Spain only on the acquisition of assets and rights (that are located, exercisable, or to befulfilled in Spain).The tax is calculated by adjusting a tax scale of progressive rates with a coefficient that takes intoaccount the previous net worth and the degree of kinship with the donor.As with other taxes transferred to the Autonomous Community Governments, inheritance andgift tax legislation has been adapted to recognize the legislative power of those governments toapprove reductions in the tax base and rates and in the coefficients for adjusting the tax payable,based on the taxpayer’s previous net worth.35