Modification of the taxable base:

The Law establishes, among others, the following reasons for modification:

1. When the consideration had been provisionally set.

   Example:

   If budgeted community expenses are invoiced along with the rental of the premises, the accrual is made based on the provisional expenses. Once the definitive invoices are known, the corrected invoice must be issued, passing on the differential fee at the rate in force at the time of accrual. The lessor will include this fee in the declaration for the period in which the rectification is made.

2. When containers and packaging susceptible to reuse are returned.

   Example:

   The sale of milk in glass bottles that can be reused involves a tax for the total consideration. Subsequently, when the bottles are returned, the tax base must be modified.

3. When discounts and bonuses are granted after the transaction has been completed.

   Example:

   The rappels granted in a year due to sales volume of the previous year give rise to a reduction in the tax base.

4. When the taxed operations or void ##1## the price is altered.

   Example:

   The return of merchandise due to quality defects will entail the rectification of the tax base as the operation is rendered void.

5. When the recipient of the subject operations has not paid the fees passed on in the following cases:

   • Bankruptcy of creditors: When, after the accrual of the operation, an order declaring bankruptcy of the recipient of the operation is issued.

     The modification cannot be made after the period of three months has elapsed from the day following the publication in the "Official State Gazette" of the order declaring bankruptcy.

     For example, if in a bankruptcy proceedings the order declaring bankruptcy was published in the BOE on January 30, the last valid day to make the modification of the tax base is the April 30th.

   • When the credits corresponding to the fees passed on by the taxed transactions are totally or partially uncollectible.

     Bad credit. Necessary requirements:

     1. Elapse of 1 year from the accrual of the tax without the collection of all or part of the credit having been obtained. However, when the holder of the credit right does not have the status of a large company, the aforementioned period may be 6 months or one year.

        In the case of term operations or with a deferred price, one year must have elapsed since the expiration of the unpaid term or installments in order to proceed with the proportional reduction of the tax base. Likewise, this period may be 6 months or a year for entrepreneurs or professionals who do not have the status of a large company, that is, when their volume of operations had not exceeded 6,010,121.04 euros during the immediately preceding calendar year. In this type of operations, it is sufficient to request collection through a judicial claim for one of the deadlines or through a notarial request to proceed to modify the tax base in the proportion that corresponds to the unpaid term or installments.

        In the case of operations to which the special regime of the cash criterion is applicable, this condition will be deemed fulfilled on the date of accrual of the tax that occurs by application of the deadline of December 31 of the year immediately following that. in which the operation was performed.

        However, as provided in the previous paragraph, in the case of installment operations or with a deferred price, it will be necessary for a period of six months or one year to have elapsed from the expiration of the corresponding period or periods until the date of accrual of the operation. .

     2. Reflection of this circumstance in the Record Books.

     3. Judicial claim for collection, or notarial requirement, even when dealing with credits guaranteed by public entities.

        In the case of credits owed by public entities, the judicial claim or notarial requirement is replaced by the certification issued by the competent body of the debtor public entity in accordance with the report of the Comptroller or Treasurer of the entity in which the obligation and its amount.

The modification must be made within 3 months following the end of the 6-month period or, where applicable, 1 year from the accrual of the tax.

In the case of operations to which the special regime of the cash criterion is applicable, this period of three months to carry out the modification will be computed from the deadline of December 31 of the year immediately following the one in which the has performed the operation.

It is necessary that the recipient of the operations acts as a businessman or professional or, otherwise, that the tax base of those operations, excluding VAT , is greater than 300 euros.

In cases of bankruptcy order and bad debts the following common rules apply:

1. The modification of the tax base will not proceed in the following cases:

   1. Credits that enjoy a real guarantee, in the guaranteed part.

   2. Credits guaranteed by credit institutions or mutual guarantee companies or covered by a credit insurance or surety contract, in the secured or insured part.

   3. Credits between related people or entities.

   4. Credits owed or guaranteed by public entities, except in the case of credits that are considered uncollectible, provided that the certificate from the competent body of the Public Entity is provided in which the non-payment is recognized. When the certificate from the competent body is requested, in accordance with the report of the Auditor or Treasurer, it will be understood that the period for the reduction of the tax base is interrupted until it is available (Consultation DGT V0615-11).

2. Nor will the modification of the tax base apply when the recipient of the operations is not established in the territory of application of the tax, nor in the Canary Islands, Ceuta or Melilla.

   However, in the event of bankruptcy declared in bankruptcy proceedings carried out by a court of another Member State to which Regulation ( EU ) 2015/848 applies, it will be permitted the reduction of the tax base when the recipient is established in another Member State. (Consultation DGT no. V3346-20).

3. Nor will the modification of the tax base be carried out in accordance with section four of article 80 of the LIVA (for bad debts) after the order declaring bankruptcy for the credits corresponding to passed-on fees. for operations whose accrual occurs prior to said order.

4. In the cases of partial payment prior to the aforementioned modification, it will be understood that the Value Added Tax is included in the amounts received and in the same proportion as the part of the consideration paid.

5. The rectification of the deductions of the recipient of the operations will determine the origination of the corresponding credit in favor of the Public Treasury.

   If the recipient of the subject transactions had not been entitled to the full tax deduction, he or she will also be indebted to the Public Treasury for the amount of the non-deductible tax amount.

The modification of the tax base is conditioned, in these cases of bankruptcy order and bad debts , to compliance with the following requirements:

• The taxable person must prove that he has sent the corresponding corrective invoice to the recipient.

• The operations must have been invoiced and accounted for by the creditor in a timely manner.

• The modification must be communicated to the Administration. This obligation to communicate the modifications of tax bases, both for the creditor and the debtor, must be carried out by electronic means, in a specific form available at the electronic headquarters of the AEAT .

  The creditor's communication must be made within a period of one month from the date of issuance of the corrective invoice, and must state that it does not refer to guaranteed, bonded or insured credits, credits between related persons or entities, or to operations whose recipient is not established in the territory of application of the Tax or in the Canary Islands, Ceuta or Melilla, in the terms provided for in article 80 of the VAT Law and, in the case of bad debts, that the debtor has not been declared in bankruptcy or, where applicable, that the corrective invoice issued is prior to the date of the order declaring bankruptcy.

  Along with this communication, and prior to it, the creditor must send through the electronic registry of the AEAT:

  • The copy of the corrective invoices, in which the dates of issuance of the corresponding corrected invoices will be recorded.

  • In the case of bad debts, the documents that prove that the creditor has requested the collection of the credit through a judicial claim against the debtor or through a notarial request.

  • In the case of credits owed by public entities, the certificate issued by the competent body of the debtor public entity.

  In the communication from the recipient who has the status of businessman or professional, the receipt of the corrective invoices must be reported, indicating the total amount of the corrected installments including, where applicable, the non-deductible ones, within the same period provided. for the presentation of the self-assessment corresponding to the period in which the corrective invoices for the operations have been received.

Once the reduction of the tax base has been carried out, it will not be modified upwards even if total or partial collection is obtained, except in the following cases:

• When the taxpayer withdraws from the judicial claim against the debtor or reaches a collection agreement with the debtor after the notarial requirement.

• When the recipient does not act in the capacity of a businessman or professional, and if he has not paid the debt, it will be understood that VAT is included in the amounts received and in the same proportion as the part of consideration received.

• When the conclusion of the contest is agreed in the following cases:

  • Once the order of the Provincial Court that revokes the order declaring bankruptcy on appeal is signed.

  • At any stage of the procedure, when the payment or consignment of all recognized credits or the full satisfaction of creditors by any other means occurs or is verified.

  • At any stage of the procedure, once the common phase of the bankruptcy proceedings has ended, when the resolution accepting the withdrawal or resignation of all recognized creditors is final.