VAT CASH RECEIPT APPROACH

VAT CASH RECEIPT APPROACH

This optional special scheme allows that sales and services are recorded as revenues for VAT purposes when they are collected, deferring declaration and payment of output VAT. Consequently, input VAT can only be deducted when purchases are paid.

However, the cutoff date for the deferral is the 31st of December of the year following the performance of the operation.

SUBJECTIVE REQUIREMENTS

Cash receipt approach can only be applied to taxable persons whose turnover in the previous calendar year has not exceeded €2.000.000. To calculate the turnover, VAT law takes:

·         all sales and services,

·         excluding

o   VAT

o   Sales equalization percentage (where appropriate)

o   Sales and services provided in previous years (where appropriate),

o   Occasional supply of real estate,

o   Supply of capital goods,

o   Supply of investment gold,

o   Financial operations

Operations excluded of cash receipt approach are considered to be carried out at the time of the operation.

OBJECTIVE REQUIREMENTS

Cash approach can be applied to all operations carried out in the territory of application of the tax but for

·         operations in simplified scheme or in the special schemes of agriculture, equalization, investment gold, services provide electronically or group of entities;

·         exports and EU operations;

·         EU acquisitions;

·         operations with reversal of taxable person;

·         imports and assimilated operations and

·         own use of goods and services.

CHARACTERISTICS OF THIS SPECIAL SCHEME

VAT is accrued at the time of total or partial collection and only for the amounts actually collected. Consequently, the moment of collection must be proved.

The right to deduct input VAT arises at the time of total or partial collection, with a cutoff date of 31st December of the year following the performance of the operation.

 

 

For further information: http://www.fernandezbaladron.com

 

VAT SPECIAL ARRANGEMENT FOR SECOND HAND GOODS, ANTIQUES, WORKS OF ART AND COLLECTOR’S ITEMS.

It is a voluntary VAT arrangement applicable to resellers, characterized by the form of calculation of the tax base.

It admits two modalities of tax base calculation: operation by operation and by global margin.

OPERATION BY OPERATION

In this case, taxpayers can choose, in each operation, between the special regime or the general one.

If they choose the special regime, they calculate the tax base as follows:

GLOBAL MARGIN           

If the taxpayer opts for this modality, the tax base is calculated through an inventory, as follows:

If the result is negative, the difference is added to the purchases oft he last period; if the result is positive, it is added to the sales of the last period.

Invoices documenting this kind of deliveries cannot separate the VAT quota, for this is NOT DEDUCTIBLE for the client. If the delivery is destinated to another EU country, the invoice must state that the operation has been taxed in accordance to articles 312 to 315 of the Directive 2006/112/EU.

For further information: http://www.fernandezbaladron.com