VAT refund - Cash accounting scheme
Cash accounting scheme has been implemented in the Spanish VAT Act since 01/01/2014. This measure has also been implemented in the following countries: Bulgaria, Italy, Luxembourg, Hungary, Austria, Portugal and Romania.
Member states may provide within an optional scheme that the right of deduction of a taxable person whose VAT solely becomes chargeable be postponed until the VAT on the goods or services supplied to him has been paid to his supplier [art. 68a of the VAT Directive].
Spanish companies included in monthly VAT refund registration (REDEME)
Companies are entitled to apply for the refund of the VAT credit through the last VAT return of the year [Q4 VAT return or December VAT return] to be filed in January of the next year. Spanish VAT authorities have six months to review the accounts and release the refund. It is however possible to request for a monthly VAT refund under conditions [Special Monthly Refund register REDEME]. Periodical VAT returns also have to be filed on a monthly basis when your company is registered in the Special Monthly Refund Register [REDEME].
Qualification of a transaction - Supply of goods with installation
As from 01/01/2015, the transaction will be treated as a supply of goods with installation in Spain provided the installed element is about 15% of the value of the contract.
Where the goods dispatched or transported by the supplier, by the customer or by a third person are installed or assembled, with or without a trial run, by or on behalf of the supplier, the place of supply is deemed to be the place where the goods are installed or assembled [art. 36 of the VAT Directive].
Spanish VAT compliance – New real-time VAT reporting for large companies
A new reporting system for invoices will come into force in 01/01/2017 and will be mandatory for companies filing monthly VAT returns [large companies with turnover exceeding € 6 million or companies registered in the Special Monthly Refund Register REDEME] and optional for others. Under new regime, companies will be obliged to report within 4 days information regarding invoices [in/out] into a special electronic register available on the website of the Spanish VAT authorities. Companies using this system will not be required to file the existing informative returns consisting of the annual information return on transaction with third parties (form 347), the annual summary (form 390) and the VAT books information return (form 340).
Non-resident companies – VAT refund via an European bank account
As from April 2016, it is possible to use an EU/SEPA bank account number for refund of a VAT credit. Non-residents are no more required to open a Spanish bank account in order to receive Spanish VAT refund accordingly.
Note that if you are VAT registered in Spain, a Spanish bank account is still necessary to pay VAT due.
Anti-fraud measures
A penalty of 10% will be applied in case of failure with the obligation to communicate to Spanish tax authorities the application of the reverse charge mechanism in the construction sector.
New way of communicating with the tax authorities
Since 01/07/16, all communications towards the Spanish tax authorities from companies filing monthly VAT returns have to be made electronically through the web portal of the tax authorities. Failure to comply with this obligation will result in a penalty.
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