How will work the new Value Added Tax (“VAT”) reporting scheme in 2017
Starting on July 1, 2017, the Spanish Tax Office has implemented a completely new system to comply with VAT obligations. In principle this new system will only apply to a relatively small number of tax payers, about 62,000, which, however, represent a significant percentage of the VAT tax revenue in Spain (around 80%, according to the forecasts of the Spanish Tax Office).
The new system basically establishes the obligation to send online, through the official site of the Spanish Tax Office (http//aeat.es) all the information contained in all the invoices issued or received, in addition to some additional data. The invoices themselves (issued or received) must not be uploaded. The data of each invoice must be uploaded to the site of the Tax Office within four days from the date of issuance. However, the information must have been uploaded by the 16 day of the month following the one in which the supply took place. This later term imposes a limit to the date in which the invoices are produced and uploaded. During 2017 tax payers will enjoy a trial period, when the term to submit the data of the invoices will be eight days.
Since all the data of every invoice would already be lodged in the Tax Office servers, this system will discharge tax payers from keeping the VAT records (list of invoices issued, list of invoices received and fixed assets). Likewise, tax payers applying the new system would no longer be obliged to submit certain informative tax statements currently in force (forms 340, 347 and 390). Other (minor) advantage of the new system is that the deadline for filing the monthly VAT returns are slightly extended. VAT returns could be submitted, always online, up to the 30th, day of the following month. Now the deadline is the 20th, of the following month. And finally, the new system has the advantage that in transactions between entrepreneurs obliged to apply it, the system will inform to both parties, in real time, about any discrepancy in the data uploaded by them.
However, the relief of these formal obligations hardly offset the loss of flexibility that the new system entails. Now VAT tax payers enjoy a buffer time allowing them to modify or adjust their invoices without much hassle. Even for transactions done the very last day of each month, they have at least 20 days to maneuver until the tax return is submitted. This buffer will be lost with the new system.
For more information kindly visit our post about the VAT compliance obligations in Spain
VAT taxable persons affected by the new VAT reporting system
Certain groups of tax payers must compulsory follow this new scheme. Basically, those tax payers who are obliged to file monthly VAT returns, as opposed to the general rule of quarterly filings. Thus, the tax payers affected by the new rule are:
a) Big companies, that is, those whose turnover had exceeded during the previous immediate calendar year of € 6,010,121.04.
b) Entrepreneurs registered in the Tax Office in order to apply the monthly refund system. Most of these tax payers are exporters, who regularly have more VAT receivable (inputs) than VAT payable (exempt sales).
c) Entities covered by the special regime of the group of entities
Besides these tax payers, who are obliged to apply the new system, any other taxable persons may opt in to apply the system. In this case, the self-assessment period for those who voluntarily opt in to apply will be monthly and not quarterly. In principle, it makes no much sense to voluntarily apply for the new system. The option to use the new system must be exercised during the month of November prior to the beginning of the calendar year in which it should take effect. This option is understood to be in force for subsequent years as long as there is no waiver, which must be made in the same time and manner as the exercise of the option.