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Practical Handbook VAT 2022

General outline

In the application of the tax, taking into account what we have seen so far, two clearly differentiated parts should be distinguished:the VAT accrued and deductible input VAT.

1.VAT due

In order for VAT to be applied to a transaction, the following aspects must be taken into account:

  1. It must be a supply of goods or services by a trader or professional, an intra-Community acquisition of goods or an importation of goods.

  2. It must not be one of the transactions declared non-taxable or exempt by law.

  3. The operation must be understood to have been carried out on the Spanish mainland or the Balearic Islands.

  4. The transaction must be deemed to have taken place or to have been carried out, as only when it takes place or is carried out is VAT due on the transaction in question (unless the special cash basis scheme is involved or there are advance payments prior to carrying out the transaction).

  5. The amount (taxable base) on which the tax rate is to be applied has to be determined.

  6. Determination of the tax rate corresponding to the transaction.

2.Deductible input VAT

In general, entrepreneurs and professionals can deduct input VAT on their purchases, acquisitions and imports from VAT , provided that they meet the requirements for deduction which can be found in Chapter 5 of this Practical Handbook.