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VAT practical manual 2021.

Frequently asked questions raised in this chapter

1. If an invoice is received two years after the purchase, should the deductible VAT be declared in the following self-assessment or should a rectification be made to the declaration for the period in which the goods were acquired?

VAT will be deducted in the settlement period in which the invoice is received, or in the following periods, since it is necessary for the taxable person to be in possession of the invoice to be able to exercise the right to deduction. In any case, it must be taken into account that the right to deduct expires within four years from the birth of said right.

However, if the entity has been declared bankrupt and the invoice corresponds to fees paid prior to said declaration, the deductible VAT must be included in the self-assessment corresponding to the period in which they were paid.

2. To calculate the deduction percentage, should advances received from clients be taken into account?

Yes, to calculate the pro rata percentage, advance payments must be taken into account in the year in which they are received and the tax accrues.

3. The VAT borne by a businessman on the acquisition of gifts that he is going to give to his main clients, can he deduct it?

No, input VAT on goods intended for customer service is not deductible.

4. A businessman purchases a computer for 1,000 euros. Should you regularize the deduction you practiced in the first year for the following four years?

No, you should not regularize the deduction made since it is not considered an investment asset as its value is less than 3,005.06 euros.

5. Is a public deed considered an invoice to be able to deduct the input VAT ?

The tax deduction in operations carried out by businessmen and professionals must be justified by a complete invoice delivered by the businessman or professional who carried out the operation. However, if all the requirements provided for in article 6 of the Billing Regulations have been included in the deed of sale, it may be used as proof of the right to deduction ( DGT - Consultation V2433-08).

6. Should a generic subsidy received by an entrepreneur be taken into account to calculate the deduction percentage?

No, since 1-1-2006 subsidies, of any type, received by taxpayers of the tax do not limit the right to deduction. Only subsidies that constitute consideration, total or partial, of subject operations, and those linked to the price.

7. Can the VAT borne in the acquisition of a car by a businessman who uses it for business and also for private travel be deducted?

Yes, it is partially deductible in the part affected by the activity. There is a legal presumption of 50 percent impact on the activity, so that, if a different percentage is to be deducted, the taxpayer or the Administration must prove a greater or lesser impact on the activity, respectively.

8. What if the person who acquires it is a taxi driver to dedicate it to transporting passengers?

In this case, it is presumed to be 100 percent affected, considering it in principle deductible in its entirety, without prejudice to the Administration being able to demonstrate a lower impact.