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VAT practical manual 2022.

Specific obligations

Entities that apply the special regime of the group of entities will have the following tax obligations:

  • The dominant entity will represent the group of entities before the Tax Administration. In this concept, the dominant entity must comply with the specific material and formal tax obligations that derive from the special regime of the group of entities.

  • Both the dominant entity and each of the dependent entities must comply with the obligations established in article 164 of the VAT Law , with the exception of the payment of the tax debt or the request for compensation or return, and must proceed, for this purpose, in accordance with the provisions of obligation 2 of the following section.

  • The dominant entity, without prejudice to the fulfillment of its own obligations, will be responsible for compliance with the following obligations:

    1. Communicate to the Tax Administration the following information:

      1. In compliance with the requirements, the adoption of the corresponding agreements and the option to apply the special regime.

        All this information must be submitted in the month of December prior to the beginning of the calendar year in which the special regime will be applied.

      2. The list of group entities that apply the special regime, identifying the entities that cause any alteration in its composition with respect to the previous year, if applicable. This information must be communicated during the month of December of each calendar year with respect to the following. However, in the event that entities have joined the group in the month of December, the information related to said entities may be presented until the following January 20.

      3. Any modification that affects the group entities that apply the special regime. This communication must be submitted within the self-assessment period corresponding to the settlement period in which it occurs.

      4. The renunciation of the special regime, which must be exercised during the month of December prior to the beginning of the calendar year in which it must take effect, both in relation to the resignation of the total number of entities that apply the special regime and in terms of individual resignations.

      5. The option for the advanced level (article 163exies.five of the VAT Law), which must be exercised during the month of December prior to the beginning of the calendar year in which it must take effect. This option will refer to the set of entities that apply the special regime and are part of the same group of entities, will have a minimum validity of one calendar year and is understood to be extended unless waived.

      6. The renunciation of the advanced level of the special regime, which will be valid for a minimum of one year.

    2. Present the aggregated periodic self-assessments of the group of entities, proceeding, where appropriate, to enter the tax debt or to request compensation or refund as appropriate. These aggregate self-assessments will integrate the results of the individual self-assessments of the entities that apply the special regime of the group of entities.

      The aggregated periodic self-assessments of the group of entities must be submitted once the individual periodic self-assessments of each of the entities that apply the special regime of the group of entities have been submitted. However, in the event that any of said self-assessments have not been submitted on time, the aggregate self-assessment may be submitted without prejudice to the actions that may arise due to non-submission.

      The liquidation period of entities that apply the special regime of the group of entities will coincide with the calendar month, regardless of their volume of operations.

      Entities that are excluded from the special regime will apply, where appropriate, the general tax regime from the settlement period in which this circumstance occurs, submitting their individual self-assessments, monthly or quarterly, depending on their volume of operations. in accordance with the provisions of article 71 of the VAT Regulations. In particular, when the exclusion from the special regime occurs with effect for a date other than the one corresponding to the beginning of a calendar quarter and the excluded entity must submit its self-assessments quarterly, said entity will submit a quarterly self-assessment for the remaining period of time until completing said quarter.

      When for a settlement period, the total amount of the balances to be returned in favor of the entities that apply the special regime of the group of entities exceeds the amount of the balances to be paid by the rest of the entities that apply the special regime of the group of entities For the same settlement period, a refund of the excess may be requested, provided that four years have not elapsed from the presentation of the individual self-assessments in which said excess originates.

      This refund will be carried out in the terms provided in section three of article 115 of the VAT Law . In such case, the compensation of said balances to be returned in subsequent aggregate self-assessments will not proceed, regardless of the period of time elapsed until said return becomes effective.

      In the event that the special regime of the group of entities ceases to apply and there are amounts pending compensation for the entities integrated in the group, these amounts will be allocated to said entities in proportion to the volume of operations of the last calendar year in which the special regime would have been applicable.

      When a businessman or professional includes the balance to be offset resulting from one of his individual self-assessments in an aggregate self-assessment of the group of entities, the offset of that amount cannot be made in any individual self-assessment corresponding to a subsequent period, regardless of whether Whether or not the special regime of the group of entities is subsequently applicable.

    3. Have an analytical information system based on reasonable criteria for the imputation of goods and services used directly or indirectly, in whole or in part, in carrying out the operations referred to in article 163 octies.one of the Law of VAT . This system must reflect the successive use of said goods and services until their final application outside the group. The information system must include a report justifying the imputation criteria used, which must be homogeneous for all the entities of the group and maintained during all the periods in which the special regime is applicable, unless they are modified for reasonable causes. that must be justified in one's own memory. This information system must be kept during the tax statute of limitations.

  • In the event that any of the entities included in the group of entities submit an untimely individual self-assessment, the applicable surcharges and interest will be applied, without the fact that the balance was originally included having any impact for such purposes. of the individual self-assessment, into an aggregate self-assessment of the group of entities. If the aggregate self-assessment corresponding to the group of entities is submitted untimely, the surcharges will be applied to the result thereof, with the dominant entity being responsible for its payment.

  • The entities that apply the special regime of the group of entities will be jointly and severally liable for the payment of the tax debt derived from this special regime.

  • Failure to maintain or maintain the information system will be considered a serious tax violation of the dominant entity. The sanction will consist of a proportional monetary fine of 2 percent of the group's volume of operations.

    Inaccuracies or omissions in the information system will be considered a serious tax violation of the dominant entity. The sanction will consist of a proportional monetary fine of 10 percent of the amount of the goods and services acquired from third parties to whom the inaccurate or omitted information refers. The dominant entity will be the subject of default for non-compliance with the specific obligations of the special regime of the group of entities, including the obligations derived from the income of the tax debt, the request for compensation or the refund resulting from the aggregate declaration-settlement corresponding to the group of entities, being responsible for the veracity and accuracy of the amounts and qualifications recorded by the dependent entities that are included in the aggregate declaration-settlement. Entities that apply the special regime of the group of entities will be liable for infractions arising from failure to comply with their own obligations.

  • The actions aimed at verifying adequate compliance with the obligations of the entities that apply the special regime of the group of entities will be understood with the dominant entity, as its representative. Likewise, the actions may be understood with the dependent entities, which must respond to the Tax Administration. Verification or investigation actions carried out on any entity in the group of entities will interrupt the statute of limitations for the tax relating to the total number of entities in the group from the moment the dominant entity has formal knowledge of them. The minutes and settlements resulting from the verification of this special regime will be extended to the dominant entity.

Example:

The companies OMEGA, SA and DELTA, SA that meet all the requirements to apply the special regime for groups of entities, have exercised the option and meet the requirements established in the VAT Law for its application. The company OMEGA, SA has a 60% stake in the capital of the company DELTA, SA. On April 19, each company presents its individual self-assessment in form 322, with the following result:

OMEGA, SA company:

  • VAT accrued: 6,000
  • Tax-deductible: 2,000
  • Self-assessment result: 4,000

DELTA, SA company:

  • VAT accrued: 1,000
  • Tax-deductible: 2,000
  • Self-assessment result: - 1,000

On April 20, the dominant entity will present a monthly self-assessment in aggregate form 353, in which it will integrate the results of previous self-assessments, as follows:

  • Company OMEGA, SA (dominant). Result (model 322): 4,000
  • Company DELTA, SA (subsidiary). Result (model 322): - 1,000
  • Self-assessment result: 3,000