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Practical Handbook VAT 2021

Contents

Form 390 corresponding to the annual summary return of VAT is divided into thirteen different sections to facilitate its completion:

  1. Passive subject: is the space for filling in the identification data of the taxable person.

    It will be necessary to tick the boxes corresponding to the monthly return register, the special regime for groups of entities for those taxpayers included in these cases, the special cash basis regime and, where applicable, information on the declaration of insolvency proceedings.

  2. Accrual:this section indicates the year to which the declaration relates.This section also indicates whether the return being filed is a replacement for a previous return, where this is the case.In addition, a box is included to identify whether it is a substitute return when the reason for filing it is exclusively the rectification of self-assessments for the period that is the subject of the return due to having been declared bankrupt.

  3. Statistical data: a brief description of the activities carried out, the heading of the Business Tax and the statistical classification of the activities carried out by the taxable person (business, professional, leasing, farming), as well as the fact, where this is the case, that these are activities not subject to Business Tax.In the case of taxpayers who are not registered at IAE and have not started to supply goods or services corresponding to business or professional activities, this circumstance shall be indicated.

    It shall also indicate whether he/she has carried out transactions during the year for which he/she is obliged to file the annual return with third parties.

    In the case of a joint filing procedure for self-assessments, the details of the entity that has assumed the filing of the returns must be entered.

  4. Details of the representative and signature of the declaration: where the taxable person is a community of property, an estate or an entity without legal personality or, in the case of a natural person, is acting through a representative, the details of the representative must be entered.

    In the case of a legal person, the details of its legal representatives shall be indicated.

  5. Transactions carried out under the general regime: this section is dedicated to the settlement of the tax corresponding to those transactions which are not included in the simplified system and for which the taxpayer must make a self-assessment of the tax.

    The structure of the settlement of the VAT accrued is made according to the different regimes under which the taxable person may be taxed:general, cash basis, second-hand goods, works of art, antiques and collectors' items, travel agencies, indicating separately the taxable bases taxed at each of the tax rates in force and the amounts due.Taxable persons who opt to apply the special advanced regime for the group of entities provided for in Article 163e.five of the LIVA , shall record separately the intra-group transactions in which the taxable amount shall be valued at cost, in accordance with the provisions of Article 163g of the LIVA.

    The VAT due on intra-Community acquisitions of goods and services and on reverse charge shall be entered on .

    A separate entry shall be made for changes in basis and tax liability for years taxed at different tax rates, or if changes have occurred due to insolvency proceedings or bad debts, or if the changes in basis and tax liability relate to intra-group transactions.

    Finally, the basis, rate and amount of the equivalence surcharge accrued in those transactions whose recipients are taxable persons subject to this special scheme, as well as the modifications in the same cases mentioned above, shall be entered separately.

    The deductible VAT is broken down into current goods and services and capital goods, separating that arising from domestic acquisitions of goods and services, intra-Community acquisitions and imports, as well as that from intra-group transactions.

    The amount of compensation paid to taxpayers under the special scheme for agriculture, livestock farming and fishing shall also be indicated, as well as the corrections of deductions and deductions for intra-group transactions, the adjustment for capital goods acquired in previous periods, including, where applicable, the adjustment of deductions prior to the start of the supply of goods or services corresponding to business or professional activities and the adjustment for the application of the definitive pro rata percentage.

  6. Transactions carried out under the simplified regime: As in the case of the general system, in the section for the simplified system, the settlement of the VAT of the activities covered by this special system will be carried out, provided that there is an obligation to submit this summary return.

    The heading of each of the activities carried out by the taxable person under this scheme shall be indicated as the heading of the column corresponding to the activity to be taxed.Next, the units of each module used shall be indicated in the same order as they appear in the Ministerial Order approving them, in such a way that if the module appearing in third place is not used, zero shall be entered;as well as the resulting accrued share of current operations.The amount of the contributions borne or paid in the year for current operations shall be shown below;the corrective indices, the percentage of the minimum quota corresponding to the activity;the amount of the refund of the VAT input tax paid in other countries, if applicable, and the minimum tax liability.Finally, the quota derived from the simplified regime of the activity shall be indicated.

    A separate table will indicate the agricultural, forestry and livestock activities covered by this simplified regime, the volume of income, the rate of tax payable appearing in the Ministerial Order approving the modules, the tax due, the tax paid and, finally, the tax derived from the simplified regime for these activities.

    Following the liquidation scheme, the sum of all the quotas derived from the simplified system of the activities carried out will be added to the VAT accrued on intra-Community acquisitions made during the year, as well as that of supplies of fixed assets and that accrued due to the taxable person's investment.

    From the total VAT due, the input VAT on the acquisition of fixed assets and, where applicable, the adjustment of capital goods, if any, shall be deducted.

  7. Result of the annual settlement: this section shall only be completed by taxable persons who are exclusively taxable in the common territory.In cases where there has been a modification of the taxable base by the taxpayer of a transaction that is totally or partially unpaid, the recipient of the transaction who is a business or professional and who has applied a pro-rata, must enter in the box corresponding to the adjustment of quotas in article 80.Cinco.5ª of the LIVA, the amount corresponding to the quotas borne that could not be deducted and for which he is liable to the Tax Authorities.Next, the sum of the settlements made under the general system and the simplified system must be indicated, as well as, where applicable, the amount of the regularised tax payments in accordance with the aforementioned article 80.Cinco.5ª of the VAT Law.Taxable persons who have opted for the deferral of VAT on importation in accordance with the terms of Article 74.1 of the Value Added Tax Regulation, shall record the amount corresponding to the VAT instalments on importation settled by Customs and paid through the monthly self-assessments of the tax.Lastly, the result of the assessment shall be entered, which shall be obtained by adding the aforementioned import VAT quotas, where applicable, to the sum entered above, from which the corresponding amount shall be subtracted in cases where the return for the previous financial year has been offset.

  8. Territorial taxation:this section is only to be completed by taxpayers who have to pay tax jointly to the State Administration and to one of the Provincial Councils of the Basque Country or Navarre.The final percentage of the operations carried out in the territory of each of the administrations and the result of the annual settlement attributable to the common territory shall be recorded, which shall be the sum of the settlements made under the general and simplified systems, as well as, where applicable, the amount of the regularised quotas in accordance with Article 80.Cinco.5ª of the LIVA, multiplied by the percentage corresponding to the common territory, to which shall be added, where applicable, the quotas corresponding to import VAT settled by Customs in cases where taxable persons have opted for the deferral of import VAT under the terms of Article 74.1 of the Value Added Tax Regulations, and shall be reduced, where applicable, by the amount corresponding to the compensation of quotas for the previous year, which shall also be attributable to the common territory.

  9. Result of settlements:the calculation of the amount of the periodic settlements with a result to be paid made in the financial year will be made.Likewise, if the last return for the financial year is to be offset or refunded, the amount of the refund shall be indicated.

    If you apply the special regime for the group of entities, and you are obliged to file form 390 as a result of not having the obligation to file the self-assessment corresponding to the last period of the financial year, you shall record the positive and negative results of the self-assessments for the financial year (form 322).

    The purpose of box 662 of form 390 is to reflect the amounts to be offset generated in the tax year in any of the settlement periods other than the last one, when they are not included in box 97 of the same form 390, i.e. when they have not been transferred to the rest of the settlement periods of the tax year.

    Example 1:

    Profit/(loss)1er quarter2nd quarter3er quarter4th quarter
    VAT due 100 0 0 0
    Input VAT 0 200 0 500
    Prior period contributions (110) 0 0 200 200
    Previous years’ contributions applied (78) 0 0 0 0
    Outstanding contributions for subsequent years (87) 0 0 200 200
    Pay 100 --- --- ---
    To offset --- 200 --- 500

    At the end of the year the taxpayer has a balance to offset of 700:

    • Generated in the 2nd quarter:200 and not carried over to any subsequent self-assessment

    • Generated in the 4th quarter:500 (not including the 200 generated in the second quarter)

    Box 95:100

    Box 97:500

    Box 662: 200

    In the annual summary, form 390, the 200 euros pending compensation at the end of the year that are not included in the self-assessment of the last settlement period must be reported in box 662.

    Example 2:

    Profit/(loss)1er quarter2nd quarter3er quarter4th quarter
    VAT due 100 0 400 0
    Input VAT 0 200 0 500
    Prior period contributions (110) 200 100 300 0
    Previous years’ contributions applied (78) 100 0 300 0
    Outstanding contributions for subsequent years (87) 100 100 0 0
    Pay --- --- 100 ---
    To offset --- 200 --- 500

    Box 85: 200

    Box 95:100

    Box 97:500

    Box 662:----

    Example 3:

    Profit/(loss)1er quarter2nd quarter3er quarter4th quarter
    VAT due 100 0 0 0
    Input VAT 0 200 0 500
    Prior period contributions (110) 200 100 300 300
    Previous years’ contributions applied (78) 100 0 0 0
    Outstanding contributions for subsequent years (87) 100 100 300 300
    Pay --- --- --- ---
    To offset --- 200 --- 500

    Box 85:100

    Box 95:----

    Box 97:500

    Box 662: 200

    In the annual summary, form 390, the 200 euros pending compensation at the end of the year that are not included in the self-assessment of the last settlement period must be reported in box 662.

    The amounts applied from the offsetting of previous years (100 euro) should be reported in box 85.

  10. Volume of operations: in this section the taxable person is asked to classify the transactions subject to VAT carried out in the year depending on the system used:general, simplified, cash basis, etc., exempt intra-Community supplies, exports and other exempt transactions with the right to deduct and exempt transactions without the right to deduct.Finally, information is requested on those transactions that do not form part of the volume of transactions because they are not habitual.

    For "transactions under the general arrangements" (box 99), enter the total amount, excluding VAT and, where applicable, the equivalence surcharge, of supplies of goods and services carried out by the taxable person during the calendar year under the general VAT arrangements.It should be borne in mind that in order to determine the volume of operations of entities opting for the advanced regime of the Special Regime for the group of entities, the amount of the taxable base resulting from the application of the provisions of Articles 78 and 79 of the LIVA.

    However, the following operations must be excluded:

    • Transactions carried out from permanent establishments located outside the territory where the costs relating to such transactions are not borne by permanent establishments located within that territory.

    • Self-consumption of goods covered by Article 9(1)(c) and (d) of the VAT Act.

      Also, transactions exempt from tax are not included in this box 99, which should be included in boxes 103, 104 and 105, nor are the transactions included in boxes 110, 125, 126, 127, 128 and 653.

  11. Specific operations: the amounts of certain transactions which, although included in previous sections, deserve special attention because of their importance, shall be entered.These operations are as follows:

    • Exempt domestic acquisitions.

    • Exempt intra-Community acquisitions.

    • Exempt imports.

    • Taxable amounts of non-deductible input VAT.

    • Taxable and non-exempt transactions giving rise to the right to the monthly refund.

    • Certain transactions linked to triangular operations.

    • Services located in the territory of application of VAT by reverse charge.

    In addition, this section should be included exclusively for taxpayers covered by the special cash basis system and, where applicable, for those taxpayers who are recipients of transactions affected by it:

    • Amounts of supplies of goods and services to which the special cash basis scheme has been applied and which have been accrued in accordance with the general accrual rule (Article 75 of the LIVA).

    • Amount of the acquisitions of goods and services to which the special cash basis scheme applies or affects in accordance with the general accrual rule (Article 75 of the VAT Law).

  12. Pro rata: this section shall be completed only by VAT taxable persons applying the pro-rata rule for transactions with the right to deduct and transactions without the right to deduct.For this purpose, for each activity, the code of the CNAE corresponding to it, the total amount of the transactions corresponding to that activity, the amount of the transactions that generate the right to deduct corresponding to that activity, the type of pro-rata (general or special) and the definitive percentage of pro-rata that corresponds shall be stated.

  13. Activities with differentiated deduction regimes: where the taxable person carries out activities with differentiated deduction schemes, the breakdown of VAT deductible in each of the differentiated sectors shall be indicated in this paragraph.