Spanish Special VAT Accounting Regime

A new VAT scheme, called the Special VAT Accounting Regime, will enter into force on 1 January 2014.

This regime applies to the following entities, resident and non-resident:

  • Annual Turnover of less than 2 million euros in the preceding calendar year.

Companies must opt in accordance to the Spanish VAT regulations when registering or in the month of December of the preceding year.

Benefits from the VAT regime
The VAT is charged at the moment of the invoice but is only due once this has been paid. Therefore, companies need to prove the receipt of the cash when submitting the return.

However, if this has not been paid before December 31st, the VAT amount will have to be included in the last return of the year.

Inconvenience from the Regime
Input VAT can only be deductible as from the moment it has been paid. Therefore, although receiving the invoice companies need to prove it has been paid.

Although a company has not opted for this regime, but they are recipients of the operations included in this regime, won’t be able to deduct the input VAT unless it has been paid. This has to be developed by the Spanish Tax department as it will affect all companies.

Additional formal obligations on the VAT books like including date of payment. Please note a new VAT return will be approved by the Spanish government in order to meet the new requirements.

Excluded operations:

  • Intra community Operations
  • Goods and services subject to simplification regimes.
  • Exempt sales
  • Reverse Charge Sales
  • Imports and operations assimilated to imports (i.e. acquisitions of goods in VAT warehouses).

Via Spanish Special VAT Accounting Regime.

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