The standstill clause tested: Advocate General’s view on Spanish VAT deduction restrictions
Fernando Matesanz of Spanish VAT Services analyzes the recent opinion in case C-515/24 concerning whether Spain could limit VAT deduction rights at the moment of its EU accession under the standstill clause.
Background of the case C-515/24
The case, Randstad España v the Spanish State Administration, questions whether a member state can impose restrictions on VAT deduction rights immediately upon joining the EU, based on the standstill clause in Article 176, second paragraph, of the VAT Directive.
Advocate General’s opinion
On October 23, 2025, Advocate General Juliane Kokott delivered her opinion at the Court of Justice of the European Union (CJEU), offering an influential interpretation relevant to Spain, where this matter has been debated extensively.
This interpretation may also affect other member states with similar historical VAT deduction issues when joining the EU.
Details of the Spanish company’s situation
A Spanish company claimed expenses for client hospitality, including tickets to sports and leisure events. While these costs were deductible for Spanish corporate income tax, the deduction of input VAT was refused under Spanish VAT Law provisions that exclude VAT deduction for entertainment or representation expenses.
“The question arises whether such national limitations on VAT deduction rights can be upheld at the moment of EU accession under the standstill clause.” – Advocate General Juliane Kokott
Implications
- The opinion challenges Spain’s restrictive approach to VAT deductions on entertainment costs.
- It clarifies the application of the standstill clause in relation to VAT deductions during EU accession.
- It may guide other member states on historical VAT restrictions aligned with EU law.
Author’s summary: The Advocate General’s 2025 opinion questions Spain’s VAT deduction limits at EU accession, potentially reshaping policies for member states under the VAT Directive’s standstill clause.