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Practical Handbook VAT 2021

Simplified systems and agriculture, livestock farming and fisheries

Exclusive limits

Article 70 of Law 11/2020, of 30 December, on the General State Budget for 2021, with effect from 1 January 2021 and valid indefinitely, amends the thirteenth transitional provision of the Law on VAT in order to extend for the period 2021 the limits for the application of the simplified regime and the special regime for agriculture, livestock and fisheries.

Accordingly, the limits applicable for the financial year 2021 are as follows:

In the case of the simplified regime, volume of income in the immediately preceding year:

  • All activities except agriculture, forestry and livestock farming:250,000 euros.

  • Agricultural, forestry and livestock activities:250,000 euros.

In the case of REAGP, volume of income in the immediately preceding year:

  • Activities covered by the REAGP:250,000 euros.

  • Remaining activities:250,000 euros.

For both schemes, the volume of acquisitions and imports of goods and services in the immediately preceding year, excluding those relating to fixed assets:250,000 euros.

Reduction in the number of tax periods affected by the renunciation of the simplified special scheme and the special scheme for agriculture, livestock and fisheries for VAT for the years 2020 and 2021

Taxpayers who have opted out of the simplified special scheme and the special scheme for agriculture, livestock farming and fisheries for the financial year 2020 may re-apply these schemes in the financial year 2021 or 2022.

Taxpayers who renounce the simplified and special schemes for agriculture, livestock and fisheries in 2021 will be able to re-apply these schemes in 2022.

Deadlines for renunciations and revocations of the simplified and agriculture, livestock and fisheries VAT regimes for 2021

The deadline for renunciation to the simplified and agriculture, livestock and fishing regimes and the revocation of the same, which are to take effect for the year 2021, is from 24 December to 31 January 2021.

The renunciations and revocations presented for the year 2021 to the special simplified and agriculture, livestock and fishing regimes during the month of December 2020, prior to 24 December, are understood to have been presented during the working period, and the option made within the period mentioned in the previous paragraph may be modified.

Payment on account for the first quarter of 2021

Entrepreneurs who carry out activities covered by the simplified system other than agriculture, livestock and forestry activities may reduce the percentages for the calculation of the payment on account corresponding to the first quarterly instalment for the financial year 2021, established in number 3 of the Instructions for the application of the VAT rates and modules in Annex II of Order HAC/1155/2020, of 25 November, by 20 per cent.

This reduction shall be 35 per cent for retail trade, hotel and catering and transport activities classified under the following headings of IAE:653.2, 653.4 and 5, 654.2, 654.5, 654.6, 659.3, 663.1, 671.4, 671.5, 672.1, 2 and 3, 673.1, 673.2, 675, 676, 681, 682, 683 and 721.1 and 3.