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Practical Handbook VAT 2021

Calculation and reimbursement of compensation

Transactions for which you are entitled to receive compensation

  1. Deliveries of natural products obtained from their holdings to other entrepreneurs or professionals.

    For example, if the farmer sells fruit to private individuals, in the course of his business, he will not charge VAT and cannot receive compensation.

    By exception, they are not entitled to this compensation:

    • When they sell to other entrepreneurs under this scheme.

    • When they sell to entrepreneurs or professionals who carry out exclusively exempt transactions without the right to deduct.

  2. Exempt intra-Community supplies of the natural products to a legal person not acting as a trader or professional.

  3. Provision of ancillary services included in the special scheme to entrepreneurs or professionals.

    It does not apply if the recipient is also covered by this scheme.

Amount of flat-rate compensation

In agricultural and forestry activities, 12 per cent applies.

For livestock and fishing activities, 10.5 per cent applies.

The percentages indicated apply to the selling price of the products or services.Indirect taxes and ancillary and complementary costs such as commissions, freight, insurance, interest, etc. are not included.

Obliged to repay the compensation

  1. As a general rule the purchaser of the goods or recipient of the services.

    Example:

    If a farmer sells, on 1 March, to an entrepreneur established in the Balearic Islands for an amount of 2,000 euros, he is entitled to 12% compensation for the sale to entrepreneurs in Spanish territory from VAT, to be reimbursed by the recipient of the purchase (2,000 x 12% = 240 euros).The consignee shall issue a receipt to be signed by the farmer, which serves as proof of the operation.

  2. The tax authorities in respect of exports or intra-Community supplies and services supplied to recipients established outside the territory where the tax applies.

    Example:

    If the farmer sells products to a French businessman for an amount of 1,000 euros, he is making an exempt intra-Community supply, for which he is entitled to request a refund of the corresponding compensation (1,000 x 12% = 120 euros), by filing form 341 during the first twenty calendar days following each calendar quarter, except for the last calendar quarter, for which there is a deadline of 30 January.

Formal requirement:receipt

To collect this compensation, the recipient must issue a receipt which must be signed by the taxable person under REAGP, to whom he must give a copy.

Data to be included in the receipt:

  1. Series and number:the numbering shall be sequential.

  2. Name and two surnames or company name, NIF and address of the consignor and consignee, as well as an indication that the holder of the holding is covered by the special regime for agriculture, livestock and fisheries.

  3. Description of the goods delivered or services rendered, as well as the place and date of the respective transactions.

  4. Price of the goods or services.

  5. Percentage of compensation applied.

  6. Amount of compensation.

  7. Signature of the holder of the agricultural, livestock, forestry or fishery holding.

Under these conditions, the employer who has paid the compensation, if the other common conditions for deductions are met, can deduct it in his self-assessment.