2. What is trading volume?

The volume of operations is regulated in article 121 of the VAT Law (37/1992) New window as well as in article 71.3.2 of its Development Regulations New window . In relation to taxpayers who have their tax domicile in the Canary Islands, article 51 of Law 20/1991, of June 7, modifying the fiscal aspects of the Canary Islands Economic Fiscal Regime, must be taken into account New window .

volume of operations means the total amount of deliveries of goods and services provided by the taxpayer during the calendar year, including those exempt from tax .

It does not include the following operations:

• occasional deliveries of real properties;

• supplies of goods classified as investment goods in terms of the transferor;

  EXAMPLE 2:

  Sales of machinery used in the activity, or transport elements.

• financial operations, whether or not exempt from VAT, and exempt operations relating to investment gold. These operations will not be included in the volume of operations when they are not common in the business or professional activity of the taxpayer.

Clarifications:

• In the calculation of the volume of operations, VAT payments, the equivalence surcharge, or the compensation received by farmers, fishermen and ranchers who pay taxes under the special regime for agriculture, livestock and fishing should not be included.

  The volume of transactions must be calculated each financial year, with effect for the subsequent financial year.

  For the purposes of knowing which operations to include or not in the calculation, those operations will be deemed to have been carried out in the financial year in relation to which:

  • The tax accrual occurs in that fiscal year.

  • The accrual of VAT would have occurred if the special regime of the cash criterion had not been applied to the operations. 

  EXAMPLE 3:

  • 2013

    Total sales amount without VAT = €1,000,000

    During 2014, the cash VAT regime can be applied

  • 2014

    Total amount of sales without VAT collected = €1,500,000

    Total amount of sales without VAT pending collection = €6,000,000

    In order to consider whether it is a Large Company, the €6,000,000 whose VAT would not be considered accrued under the Cash Regime must be taken into account.

• When all or part of a business or professional asset is transferred, the purchaser of said asset will see his or her volume of operations affected by said transaction.

  Specifically, the volume of operations to be computed by the acquirer will be the result of adding to the volume carried out by the acquirer in the calendar year, if applicable, the volume of those carried out in the same period by the transferor, in relation to the portion of assets transferred.

  For these purposes, the transfer of all or part of a business or professional asset is considered to be a global transfer or a transfer of a branch of activity, regardless of whether or not any of the non-taxable assumptions regulated in art. 7.1 of the LIVA apply.

Finally, you can consult the relevant doctrine and jurisprudence below:

• 2.1 Relevant doctrine and jurisprudence