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Spanish VAT cash accounting 2014

  • Dec 22, 2013 | Richard Asquith

Spanish VAT cash accounting 2014

Spain is the latest country to introduce a simplified cash-based VAT reporting facility for smaller companies.  This helps small business keep cash flows under better control, and simplifies the Spanish VAT compliance burden.

The new regime is based on Law 14 / 2013, comes into effect on 1 January 2014.  It is offered to taxable persons (companies and VAT registered individuals) with an annual turnover below €2 million.

There are a number of sectors which may not apply for the scheme, including:

  • operators within bonded VAT warehouses
  • Importers, exporters and intra-community supplies
  • Supplies subject to the reverse charge
  • Businesses with cash transactions from any single customers totaling in excess of €100,000
  • Travel agents
  • Art dealers and second hand goods
  • Applying for cash accounting

Taxable persons should apply to join or exit the cash accounting regime by the December of the previous year.  Once approved, the must include a note on their invoices that they are now subject to the regime.  They must keep detailed records of the cash payments made against purchase and sales invoices, plus details of the bank transfers to support the VAT return.

The principle benefit is that the companies can then recover any VAT paid on invoices immediately, and offset this against output VAT.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara