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Practical Handbook VAT 2022

Rectifying deductions

The cases of rectification of deductions are:

  1. Incorrect calculation of deductions.

  2. Rectifying of taxable income due to:

    1. Incorrect calculation.

    2. Modification of the taxable base.

If the correction involves an increase in tax liability , it can be made in the self-assessment of the period in which the taxable person receives the corrective invoice or in subsequent returns, provided that four years have not elapsed since the accrual of the tax or since the circumstances determining the modification of the taxable base have occurred.

If the correction is not due to a change in the taxable amount, it may not be made more than one year after the issuing of the corrective invoice.

If the rectification involves a reduction of quotas, is mandatory and must be carried out:

  • If it is due to founded error of law or modification of the taxable base: in the self-assessment for the period in which the corrective invoice was received.

  • In the event of bankruptcy or if the encumbered transaction is rendered ineffective as a result of the exercise of a bankruptcy reintegration action or other contestation actions exercised within the bankruptcy, if the initial purchaser or acquirer is also in bankruptcy:in the self-assessment for the period in which the right to deduct input tax was exercised, without the application of surcharges or interest for late payment.

  • If it is for another cause: shall file a corrective self-assessment, applying the appropriate surcharge and late payment interest, pursuant to Article 27 of Law 58/2003, of 17 December, on General Taxation.

A "Calculator for modification deadlines BI and other rectifications" has been incorporated in the Electronic Headquarters of the AEAT , where you can consult the deadline for modifying the input VAT deducted when the circumstances foreseen in article 80 of the LIVA or an error occurs.It also facilitates the period and exercise of form 303.

Scheme for rectifying taxable income and deductions
Taxable incomeRectification procedureIncome deducted
Type of changeType of change
  1. In the self-assessment corresponding to the period in which the rectification is made, when the rectification is caused by any of the following reasons:

    1. Return of containers and packaging.
    2. Discounts and rebates made after the transaction, provided they are duly justified.
    3. When the taxable transactions are wholly or partially ineffective:
      • as part of a final legal or administrative resolution
      • pursuant to the law or trade uses.
    4. When the price is altered after the transaction has taken place.
    5. When, following the accrual of tax and provided that the amounts charged have not been paid, a bankruptcy declaration is issued and provided that the requirements established by the tax regulations are met.
    6. In the case of bad debts.
    7. Well-founded error of law.
    8. Amount of the consideration not known at the time that the tax is accrued with the provisional calculation of the taxable amount on the basis of well-founded criteria.
  2. In all other cases and provided that no prior request has been made, the taxpayer must submit a self-assessment in addition to the self-assessment for the period in which the transactions now being rectified were settled, with the appropriate surcharge and late payment interest applied.

  1. Correct the situation in the self-assessment corresponding to the period in which the rectification is to be made or in subsequent periods prior to:

    • One year having elapsed for taxable income.
    • Four years for input tax if the rectification is for reasons of Article 80 of the Law of VAT , otherwise it will be one year from the issuing of the rectifying invoice.
  2. As regards overcharged taxes, the decision may be taken, where appropriate, to launch the procedure for rectifying the self-assessment.