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Practical Handbook VAT 2021

Frequently asked questions raised in this chapter

1.Is a farmer under the special regime for agriculture, livestock farming and fishing obliged to invoice?

Normally, No. Farmers do not have to issue invoices, they only have to sign the receipts issued by the recipient of their operations.However, an invoice must always be issued for the supply of immovable property.

2.A company manufactures two different products, can it use sequential numbering and a series for each product?

Yes, the company can set up different invoice series, especially, but not exclusively, when there are several invoicing centres.

3.Are restaurants generally authorised to issue simplified invoices?

Two scenarios may occur:

  • If they are taxed under the simplified scheme for VAT they are exempt from the obligation to invoice, except for transfers of fixed assets.

  • In another case, restaurants may issue simplified invoices (with the content of article 7.1 of the Regulation on Invoicing), without the need to request prior authorisation, when their amount does not exceed 3,000 euros, VAT included.

However, when the recipient is a business person or professional or when they require it in order to exercise a tax right, the simplified invoice must also include the information referred to in Article 7.2 of the Regulation on Invoicing.

4.How long should the purchase invoice for a building be kept?

  1. If started to use in the same year as acquisition, it should be kept for 14 years:the year of purchase, the following 9 years as the regularisation period and the following 4 years.

  2. If use begins in years after acquisition, it should be noted that the period of regularisation begins in the year of use and that the years for which invoices must be kept should be increased.

5.Should each invoice be recorded separately in the invoices received record book?

No, a summary entry can be made for invoices received on the same date, provided that they come from a single supplier, the amount of each invoice does not exceed 500 euros excluding VAT, and the combined amount does not exceed 6,000 euros excluding VAT.

6.A taxable person becomes obliged to use SII in the course of the 2020 financial year, which invoicing records must be sent via the Tax Agency's e-Office?

All invoicing records for transactions carried out since the beginning of the 2020 financial year must be submitted, taking into account that the deadline for submitting information prior to inclusion in the SII will be from the date of inclusion until the end of the financial year.

7.Which taxable persons must keep the record books of VAT through the Tax Agency's e-Office?

This system of keeping record books, known as the Immediate Supply of Information, is compulsory for taxable persons who have a monthly VAT settlement period:

  • Registered with REDEME (Monthly VAT Return Registry)

  • Large businesses for the purposes of VAT (taxable persons with a turnover for VAT purposes in the immediately preceding calendar year of more than €6,010,121.04)

  • VAT Groups

On a voluntary basis, taxpayers who are not obliged to do so, but who decide to do so, may also keep their record books through the e-Office.To do this, they can exercise the option in the month of November before the start of the calendar year in which it should come into effect or when filing the start-up return, taking effect in the calendar year underway.

Voluntarily exercising this option in 2017 implies the obligation to file monthly self-assessed VAT returns.

For self-assessment periods starting in 2018, taxpayers who have voluntarily opted in to SII, will maintain their quarterly settlement period.

8.Must a taxable person for VAT whose transactions are exclusively exempt in accordance with the provisions of Article 20 of the Tax Law and whose volume of transactions for VAT purposes in the immediately preceding calendar year exceeds €6,010,121.04, keep their record books through the Tax Agency's e-Office?

Yes, you are obliged to keep your record books through the Tax Agency's e-Office.(Consultation of the Taxation General Directorate V1588-17)

Although it is not necessary to keep a record of invoices issued when there is no obligation to issue invoices for all transactions, in accordance with the provisions of the Regulation governing invoicing obligations, there is the obligation to keep a record of invoices received, in general, regardless of whether the activity carried out is totally exempt from tax and without the right to deduct the amounts paid for the acquisition of goods and services for said activity.