Royal Decree 828/2013 amending the VAT regulation


Last October 27th was published the Royal Decree 828/2013 amending the VAT and other Regulations, mainly concerning formal aspects and the new VAT scheme for “cash criteria”.

The main amendments are:

1.       VAT scheme based on cash criteria

The regulations established are mostly related to invoicing obligations, VAT Ledgers, annual statement of transactions with third parties and other formal aspects.

–          Operators under this scheme must include a specific mention of the scheme in the issued invoices (“Régimen especial del criterio de caja”).

–          VAT Ledgers corresponding to the operators under the scheme must include additional fields. For the VAT Ledger of outgoing invoices it must be stated the dates of cash collection and the amounts collected, as well as the collection method used. For the VAT Ledger of incoming invoices it must be stated the date of payment, amount and payment method used.

–          Additionally, the operators that, even not under the special scheme, are recipient of transactions performed by operators in the special scheme, must also state in the VAT Ledger of incoming invoices the date of payment, amount and payment method used.

–          Those transactions must be separately stated in the annual statement of transactions with third parties (Form 347).

–          Considering the scheme’s application, the application period is during December of the previous year in which the scheme will start or through the registration return in case of commencement of the activity. Moreover, to give up from the scheme must be applied during December of the previous year in which this is effective. Giving up from the scheme would mean not to apply for this during three years.

–          Cases of exclusion from the scheme: to exceed 100,000 Euro in the cash collection from the same client and to exceed 2,000,000 Euro as yearly turnover.

2.       Cases of reverse charge

For some transactions involving the supply of immovable goods, works for land urbanization or the construction or rehabilitation of buildings, the recipient is obliged to expressly communicate to the supplier, previously or simultaneously to the moment the transaction takes place, the requirements in order for the reverse charge to be applicable.

–          Supply of immovable goods where the VAT exemption is given up. The recipient must communicate to the supplier the condition of taxpayer fully entitled to deduct the Input VAT due on the purchase.

–          Supplies of immovable goods made as warranty’s execution. The recipient must communicate to the supplier the condition of entrepreneur or professional for the transaction.

–          Works over immovable goods. The recipient must communicate to the supplier both, the status of taxable person and the fact that the works are performed in the framework of land urbanization, construction or rehabilitation of buildings.

3.       VAT of bad debts and insolvency administrative process

For taxable persons under insolvency administrative process, the rectification of the VAT deductions coming from the taxable base amendments made by the supplier must be included in the returns corresponding to the period in which the deduction was reported, except:

–          VAT quotas that were non-deductible by the taxable person under insolvency administrative process.

–          VAT quotas deductible but related to transactions of periods barred by law.

In both cases the rectification of the deductions must be reported through the return corresponding to the transactions previous to the administrative process.

Regarding the amendment of the taxable base due to bad debts and/or insolvency administrative process, the Royal Decree provides for new formal requirements:

–          Obligation of the supplier to send the rectifying invoice to the recipient of the transaction.

–          In case of insolvency administrative process, a copy of the rectifying invoice must be also sent to the administrator.

–          The communication of the amendments before the Tax Authorities must be done by both, the supplier and the recipient, through electronic means, through the internet page of the Tax Authorities.

4.       Changes in the VAT returns

Formal requirements have been introduced as regard the VAT returns:

–          The taxable person is allowed to apply for the special pro-rata through the last VAT return of the calendar year, regularizing the VAT deductions made during the year. This option will have a three years term.

–          The obligation of filing the informative VAT Ledgers return (Form 340) will only apply for operators under the special scheme for monthly VAT refunds.

–          Deadline for filing the VAT return corresponding to July is on August 20th instead of September 20th.

Should you wish to receive further information as regard the amendments introduced by the Royal Decree 828/2013, please contact us.

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