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VAT practical manual 2021.

Rectifying deductions

The cases of rectification of deductions are:

  1. Incorrect determination of deductions.

  2. Rectification of fees charged by:

    1. Incorrect determination.
    2. Modification of the tax base.

If the rectification involves an increase in installments , it can be made in the self-assessment of the period in which the taxpayer receives the corrective invoice or in the following declarations, provided that four years have not passed since the accrual of the tax or since the circumstances determining the modification of the tax base have occurred.

If the rectification does not have a cause in the modification of the tax base, it cannot be made after one year from the issuance of the corrective invoice.

If the rectification involves a reduction in quotas, is mandatory and must be carried out:

  • If it is due to a legal error or modification of the tax base: in the self-assessment of the period in which the corrective invoice was received.

  • In the event of bankruptcy or if the taxable transaction becomes void as a result of the exercise of a bankruptcy reintegration action or other challenge brought within the bankruptcy, if the initial buyer or acquirer is also in bankruptcy: in the self-assessment of the period in which the right to deduct the contributions paid was exercised, without applying surcharges or late payment interest.

  • If it is for another reason: You must submit a corrective self-assessment, applying the applicable late payment surcharge and interest, according to article 27 of Law 58/2003, of December 17, General Tax.

The Tax Agency has added to its website a "Calculator for modification deadlines BI and other rectifications", where you can consult the deadline to modify the VAT supported deducted when the circumstances provided for in article 80 of the LIVA or an error occur. It also provides the period and fiscal year of form 303 where the corresponding adjustment can be made: https://sede.agenciatributaria.gob.es/wlpl/AVAC-CALC/CalculadoraMBIServlet

Scheme for rectification of passed-on fees and deductions
Passed-on feesRectification procedureFees deducted
Variation typeVariation type
Increase

  1. In the self-assessment corresponding to the period in which the rectification is carried out, when it is based on any of the following causes:

    1. Return of containers and packaging.
    2. Discounts and bonuses made after the operation, provided they are duly justified.
    3. When the taxed operations are totally or partially without effect:
      • by final judicial or administrative resolution
      • in accordance with law or commercial usage.
    4. When the price is altered after the operation has been carried out.
    5. When, after the accrual of the Tax and provided that the passed-on fees have not been paid, an order declaring bankruptcy is issued and provided that the requirements established by the Tax regulations are met.
    6. When it comes to bad credits.
    7. Legal error.
    8. Amount of consideration not known at the time of accrual of the tax with provisional fixation of the tax base applying well-founded criteria.

  2. In the remaining cases and provided that there has been no prior request, the taxable person must present a self-assessment complementary to that of the period in which the settlement of the operations that are now being rectified was carried out, applying the surcharge and late payment interest that may apply.

 Decrease
Decrease

  1. Regularize the situation in the self-assessment corresponding to the period in which the rectification must be carried out or in subsequent periods until the period of:

    • One year for the passed-on fees.
    • Four years for the contributions borne if the rectification is for reasons of article 80, otherwise it will be one year from the issuance of the corrective invoice.

  2. In the case of overpaid contributions, you may choose, when appropriate, to initiate the self-assessment rectification procedure.

 Increase