General pro rata
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applies when the taxpayer jointly carries out operations with and without the right to deduction and the special apportionment is not applicable.
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The incurred fees are deductible in the following percentage:
Deduction percentage = (transactions eligible for deduction ÷ total transactions) x 100
The result of this operation is rounded up to the nearest unit.
Criteria to be taken into account in relation to subsidies:
With the approval of Law 3/2006, of March 29, all restrictions on the right to deductions as a result of the receipt of any subsidy, whether current or capital, are eliminated. However, subsidies that constitute full or partial compensation for the taxable transactions, and those linked to the price, will be taken into account for the calculation of the apportionment, including them in both the numerator and the denominator, depending on whether they form part of the taxable base of transactions that generate or do not generate the right to deduction.
They are not counted in the numerator or denominator:
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Operations carried out from permanent establishments located outside the territory of application of the tax.
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The VATinstallments that have been taxed on the operations carried out by the taxable person.
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Deliveries and exports of capital goods.
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Real estate or financial transactions that do not constitute the taxpayer's usual business or professional activity.
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Operations not subject to tax according to the provisions of article 7 of the VAT Law.
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Self-consumption due to change in destination of stocks that are now used as investment goods.
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Subsidies that do not form part of the tax base.
The amount of the transactions is determined according to what is established for the determination of the tax base, even in exempt or non-taxable transactions.
To carry out the temporary imputation the rules on the accrual of the tax apply.
Calculation of input VAT that is deductible:
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Each calendar year, the definitive deduction percentage of the previous year is provisionally applied.
The application of a different provisional percentage may be requested when circumstances arise that could significantly alter it.
This request must be made within the following time periods:
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In the month of January of the year in which it takes effect.
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Until the end of the month following the one in which the circumstances justifying the request occur.
In these cases, the quotas affected by the new provisional deduction percentage will be those borne from the date indicated by the Administration. In the event of authorization through positive silence, the new percentage will be applied to the quotas borne from the first day of the tax settlement period following the one in which the authorization was issued.
The application is submitted to the competent body of the Tax Agency and is deemed to be granted once one month has passed (counted from when the application was entered into the register of the body competent for processing) without a resolution having been notified.
In the first year of the exercise of the activities or in the case of deductions prior to the habitual performance of the delivery of goods or provision of services, the deduction percentage will be the one proposed by the taxpayer to the Administration, unless the latter sets a different one.
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In the last self-assessment, the taxpayer calculates the final deduction pro rata based on the operations carried out in the calendar year.
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The final deduction percentage is applied to the contributions incurred during the calendar year, and the deductions made must be regularised.
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Example:
A company is dedicated to renting homes and business premises.
The operations carried out in year “n-1” were the following:
- Rental of housing: 12,000 euros
- Rental of business premises: 32,000 euros
The operations carried out during year “n” were the following:
- Rental of housing: 20,000 euros
- Rental of premises: 25,000 euros
The VATborne in “n” for the expenses used in the properties (both homes and premises) has been 1,280 euros in the first three quarters and 160 euros in the fourth quarter. The rental of housing is an exempt transaction with no right to deduction, while the rental of premises is a taxable and non-exempt transaction with the right to deduction.
The rental of housing and premises constitutes a single sector as they have the same group in the CNAE , with the general prorata rule being applicable (unless the special rule is applicable).
Deductible input VAT
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The provisional prorata percentage for year “n” is calculated based on the operations carried out in “n-1”:
Prorata percentage = (Operations with right to deduction ÷ Total operations) x 100 = {Rental of premises (32,000) ÷ [Rental of premises (32,000) + Rental of housing (12,000)] x 100} = (32,000 ÷ 44,000) x 100 = 72.72727%
The applicable percentage is rounded up and will be 73%.
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Application of the percentage to VATto obtain the input VAT that will have been deducted in the self-assessments corresponding to the first three quarters: 1,280 x 73% = 934.40
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In the fourth quarter, the final deduction percentage is calculated for year “n”.
Prorata percentage = {Local rent (25,000) ÷ [Local rent (25,000) + Residential rent (20,000)] x 100} = (25,000 ÷ 45,000) x 100 = 55.5555%
Rounded up to 56%.
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Application of the percentage to input VAT to obtain the deductible input VAT corresponding to the fourth quarter: 160 x 56% = 89.60
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Regularization of deductions from previous quarters:
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Deduction applicable to 4Q = 89.60 - 217.60 = - 128 euros of lower deduction or income.
Verification:
Total input VAT in “n”: