VAT SCHEME FOR AGRICULTURE & FISHERIES

 

This special VAT arrangement is characterized by the absence of output VAT (except in case of import, EU acquisition or reversal of taxable person). Since there is no output VAT, input VAT cannot be deducted. In order to neutralize the impact of output VAT, there is a flat-rate compensation in every operating sale: 12% for agriculture operations and 10,5% for livestock and fisheries operations. This percentage is applied to sale price of products or services, excluding indirect taxes.

REQUIREMENTS

It is applicable to the owners of agricultural, livestock, forestry or fishing farms that had not opted out this scheme, unless they had ceded the farm or were in an integrated livestock regime.

It is not applicable to activities of transformation, processing of manufacturing of natural products, sale of own products mixed with others acquired from third parties (unless they are mere preservatives), sale of products outside the farm, sports and recreational activities, sea fishing, independent livestock and accessory services that are not included in the scheme.

Trade, cooperative and agricultural processing companies can not use this special arrangement. Self-employed whose turnover in this special scheme has exceeded €250,000 in the previous year and self-employed whose turnover in other VAT arrangements had exceeded €250,000 in the previous year cannot apply it either.

WAIVER TO VAT AGRICULTURAL ARRANGEMENT

Taxpayers may waive to this special arrangement by delivering a form 036 or 037 to the Spanish Tax Office. The waiver has a minimum validity of 3 years. A taxpayer who practices a deduction of input VAT is understood to have resigned tacitly to this special arrangement.

FLAT-RATE COMPENSATION

The refund of the flat-rate compensation (12% or 10,5%, as explained above) must be paid by the recipient of goods or services. However, in case of exports, EU operations and operations provided to recipients who are established outside the territory of application oft he tax, it is made by the Public Treasury.

BEGIN OR END OF THE SPECIAL ARRANGEMENT

When an activity changes from general to special VAT scheme, the owner is obliged to pay the compensation corresponding to future deliveries of natural products already existent on the date of change.

When an activity changes from special to general VAT scheme, the owner will have the right to deduct input VAT corresponding to operating goods affected to the activity on the date of change.

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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.

 

 

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VAT SCHEME FOR GROUPS OF ENTITIES

 

It is applicable (on a voluntary basis) to businessmen and professionals who are part of a group of entities linked to each other in the financial, economic and organizational orders, provided that each entity resides in the territory of application (Iberian Peninsula & Balearic Islands). 

The application of this regime places the entities that compose the group in the obligation of Immediate Information Supply. 

CHARACTERISTICS 

      The tax base is determined by differentiation between:

1. INTRAGROUP OPERATIONS –The tax base is calculated as the cost of intragroup operations with supported VAT (goods & services), provided that those operations give the right to VAT deduction, in accordance with article 94 LIVA. 
2.  OPERATIONS WITH OTHER ENTITIES (which do not belong to the group)- Each entity oft he group calculates and declares individually its own VAT.

To calculate the liquidation, the entities of the group will apply the SPECIAL PRORRATE.

LEVELS

This VAT scheme has two levels: normal & advanced (article 163 sexies cinco, in relation to article 163, octies, uno & tres LIVA).

·         NORMAL – each entity belonging to the group makes a group declaration, considering the deliveries and provision of services and the acquisitions and imports with respect to the entity it declares.

·         ADVANCED – The parent entity presents a single declaration for the entire group of entities, subject to the individual agreement of each of the subsidiary entities. 

CONDITIONS

The VAT scheme of group of entities requires the individual agreement of the entities that have opted for its application. The agreement must be adopted by the Board of Directors in the month of December of the year immediately preceding the one in which the agreement produces its effects and it has a minimum validity of 3 YEARS in case of normal level, and 1 YEAR, in case of advanced level. These deadlines are automatically extended, unless expressly waived. 

The VAT scheme of groups of entities will cease:

1. in case INDIRECT ESTIMATION becomes mandatory or
2. in case of breach of obligations arising from this VAT scheme (e.g.: declarations).

SPECIFIC OBLIGATIONS

The parent entity is responsible for the compliance of tax obligations derived from the VAT scheme of groups of entities; both the parent and each of the dependents are responsible their own individual obligations (article 164 LIVA).

The parent company is responsible for: 

1. COMMUNICATING TO THE SPANISH TAX OFFICE the fulfillment of requisites, the adoption of correspondent agreements, the option for the aplication of this VAT scheme, the list of entities belonging to the group, any modification that affects the VAT scheme, waiver of the VAT scheme, option for the advanced level and waiver to the advanced level. 
2. SUBMITING PERIODIC AUTOLIQUIDATIONS of the group of entities.
3. HAVING AN ANALYTICAL INFORMATION SYSTEM, based on reasonable criteria of imputation of goods and services used, directly or inderectly, totally or partially, in the performance of operations referred to in article 163.octies.uno of LIVA.

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VAT SCHEME FOR INVESTMENT GOLD

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Investment gold are gold bullion/sheets of milesimal fineness 995 [1] and gold coins of milesimal fineness 900, minted after 1800, that have been legal tender in the country of origin, sold at a price that does not exceed 80% of the market value of the gold contained in them. [2]

EXEMPTION OF TRANSACTIONS, WHEN THE OBJECT THEREOF IS INVESTMENT GOLD

In general terms, deliveries, EU acquisitions and imports of investment gold are exempt from VAT, but the taxable person may waive the exemption in some cases. Mediation services in these operations (on behalf of thirty parties) are also exempt. 

The exemption does not apply to EU acquisitions in which the provider of investment gold renounces the exemption. 

In case two possible exemptions were applicable (a gold investment and a EU acquisition one), investment gold one prevails. 

WAIVER OF EXEMPTION

Providers of investment gold may waive the exemption in the following cases:  

1. When they are regularly dedicated to produce investment gold or to transform non-investment gold in investment gold.
2. In deliveries of gold which has been transformed into investment gold. 
3. When the acquirer is a buisnessman or a professional.

The exemption can also be waived in case of mediation on behalf on thirty parties in exempt operations, provided that the acquirer is a businessman or a professional, and  when the provider had waived the exemption. 

The waiver must be done per operation, performed by the service provider and communicated in writing to the acquirer (prior or simultaneously to the acquisition). The acquirer also has to be informed in writing of his henceforth condition of taxpayer. 

DEDUCTIONS

In general terms, supported VAT is not deductible, since investment gold deliveries are exempt from VAT. 

Exceptionally, the following must be taken into account:

1.  Exempt deliveries of gold investment generate the right to deduct supported VAT quotes when done by businessmen or professionals who have produced or transformed that investment gold. 
2. Deliveries of exempt investment gold by businessmen who are not contemplated in a), generates the right to deduct.
3. Supported VAT corresponding to the internal or EU acquisition of that investment gold, when the supplier had waived the exemption.
4. Supported VAT corresponding to acquisition or import of investment gold, when it did not meet the pertinent requirements at the time of its acquisition or import.
5. Supported VAT corresponding to services of change of form, weight or milesimal fineness.

TAXABLE PERSON

In case of waive to the exemption by the provider, the taxable person of investment gold deliveries, is the recipient businessman or professional. 

FORMAL OBLIGATIONS

Businessmen and professionals who carry out operations of investment gold must keep copies of all invoices corresponding to these operations within 5 years (article 140 sexies of VAT Law)

Businessmen and professionals who carry out gold investment operations and other kind of operations must pertinently separate the operations corresponding to each scheme in their VAT books. 

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[1] Provided that the weight accomplishes addendum 9th of VAT Law.

[2] These requirements are accomplished in all coins related by the EUOD before 1st of December each year.

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