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Practical Handbook VAT 2021

Frequently asked questions raised in this chapter

1.When is an activity considered to be self-employed for the purposes of the application of this regime?

When it is specifically included in the Ministerial Order regulating the simplified system.

2.How are staff employed under the simplified scheme of VAT?

Both unpaid and salaried employees are quantified according to the rules of the instruction for the application of signs, indices or modules in the IRPF.

3.How do I opt out of the simplified regime?

The waiver shall be made by means of a census declaration (forms 036 or 037), at the time of filing the declaration of commencement of activity or, where appropriate, in the month of December prior to the calendar year in which it is to take effect.These shall cover a minimum period of three years and shall be deemed to be extended for each of the following years in which the scheme may be applicable, unless revoked in December.

A tacit waiver is also possible when the self-assessment for the first quarter of the year is filed on time, applying the general system, or when the first self-assessment is filed on time, applying the general system, for the quarter immediately following the start of the activity, if the activity started at the beginning of the year.

4.What forms must be submitted by entrepreneurs or professionals who carry out activities under the simplified regime?

Entrepreneurs and professionals who carry out activities under the simplified regime must file quarterly form 303 for self-assessment of VAT.In this way, a single VAT self-assessment form 303 groups together all the cases of filing self-assessments that are the responsibility of taxpayers with periodic reporting obligations, with the sole exception of entities that apply the special regime of the group of entities and the special regimes for telecommunications, radio or television broadcasting or electronic services.

In addition, they will have to submit an annual summary declaration, form 390, unless they are exempted from this obligation by Order of the Minister of Finance and Public Administration, in accordance with Article 71 of the Regulation of the VAT.Currently exempt from filing form 390 are business people or professionals who are taxed only in common territory and are exclusively under the simplified regime and/or who also exclusively carry out the activity of renting urban real estate (or activities for which there is no obligation to file periodic self-assessments).

5.What is the deadline for filing form 303 and annual summary form 390?

The filing of the self-assessment tax return and, where applicable, the payment of form 303 shall be made during the first twenty calendar days of the month following the end of the corresponding quarterly settlement period, except for the last settlement period (Q4), which shall be filed during the first thirty calendar days of January.Where applicable, it must also be filed with the annual summary return form 390 (the filing of the annual summary return may not be required if so established by Order of the Minister of Finance and Public Function) during the first thirty calendar days of the month of January.

If the deadline falls on a Saturday or a non-business day, it shall be understood that the deadline ends on the first following business day.

6.What quotas can an entrepreneur who has two activities, one taxed under simplified taxation and the other under the equivalence surcharge, deduct?

  • Taxes borne or paid on the acquisition or importation of goods and services used in the simplified sector of activity will be deductible in accordance with the regulations governing this system.

  • Taxes borne in relation to goods and services used in the sector under the equivalence surcharge are not deductible to any extent.

  • Taxes borne or paid in respect of goods and services used simultaneously in both sectors shall be 50 per cent deductible for the purposes of the simplified scheme.

7.Is it possible to reduce the amount to be paid in case of incapacity of the holder?

Yes.A reduction in the rates or modules may be requested in cases where the owner of the activity is temporarily incapacitated and has no other staff employed.