FACUA reports six telecom companies to the Ministry of Finance for charging VAT on contract cancellation penalties

FACUA-Consumers in Action has reported six telecommunications companies before the General Sub-Department for Consumption Tax of the Ministry of Finance and Public Administrations for charging VAT on contract cancellation penalties.

Movistar, Vodafone, Orange, Yoigo, Jazztel and Ono violate Law 37/1992, of the 28^th December, on the Value of Added Tax by applying it to the penalties they charge users for when they cancel contracts before completion.

FACUA warns that users have seen an increase in fees which companies apply on a 21% illegal basis, given that they are not used to charge for a service provided, but rather as damages for breaching a contract.

Because of this, it r