Practical example

Mr. "XX" has been carrying out the activity of Cafeteria, epigraph 672.1, since 2019.

The activity is carried out in rented premises for which he pays 760 euros per month (plus VAT).Since it started, the taxpayer has been under the simplified VAT regime and has developed the activity with the following elements:

• Electrical power:20 kw
• Tables:
  • 4 tables for 4 persons
  • 2 tables for 2 persons
• Type "B" machines:2 machines

As for the staff employed in the business, the owner and 2 full-time employees work in the business throughout the year;one worker of 18 years 900 hours, from 1 February, and two workers, from 1 July to 30 September, who have worked 720 hours each.

In 2021, the number of workers was 2 full-time workers for the whole year plus the owner of the activity.

Other information to be taken into account:

• On 1 July 2022 it purchased an electric oven for 450 euros and on 13 October it replaced the furniture for 2,000 euros.

• On 30 November it purchases napkins, coasters and other material in Portugal for 2,500 euros.

• At the end of the year, the total amount of VAT borne on current operations amounts to 9,330 euros.

  1. Calculate the payment on account for the first three quarters.
  2. Determine the annual fee for the activity.
  3. Determine the result of the final self-assessment for the fourth quarter.

• In the 2022 financial year, the volume of transactions under the simplified regime amounted to 130,000 euros.

Solution:

1. Calculation of the payment on account:

   Activity:cafeteria Epigraph IAE:672.1, 2 and 3
   Module	Definition	Unit	Annual accrued fee per unit
   1	Staff employed	Person	2,356.07
   2	Electrical power	Contracted kW	124.00
   3	Tables	Table	70.86
   4	Type "A" machines	Type "A" machine	221.43
   5	Type "B" machines	Machine type "B	832.60
   6	Lottery commissions	Euro	0.21
   Minimum fee for current operations:13% of the quota accrued for current operations

   Base data as of 1 January 2022:

   • Staff employed:3 persons x 2.356,07 = 7.068,21 euros
   • Electrical power:20 kw x 124,00 = 2.480,00 euros
   • Tables:5 tables x 70.86 = 354.30 euros
   • Type "B" machines:2 machines x 832.60 = 1,665.20 euros

   • Total: 11.567,71 euros

   • Payment on account (4% x 11.567,71) = 462,71 euros

   • Choose to deduct input VAT on fixed assets in the last quarterly return.

   • Quarterly quotas Q1, Q2 and Q3:462.71 euros

   • (See the 1T of model 303, similar to 2T and 3T)

2. Annual activity fee:

   Activity:cafeteria IAE heading:672.1, 2 and 3
   Module	Definition	Unit	Annual accrued fee per unit
   1	Staff employed	Person	2,356.07
   2	Electrical power	Contracted kW	124.00
   3	Tables	Table	70.86
   4	Type "A" machines	Type "A" machine	221.43
   5	Type "B" machines	Machine type "B	832.60
   6	Lottery commissions	Euro	0.21
   Minimum fee for current operations:13% of the quota accrued for current operations

   Current operations accruals:

   • Staff employed:4,10 persons x 2.356,07 = 9.659,89 euros
   • Electrical power:20 kw x 124,00 = 2.480,00 euros
   • Tables:5 tables x 70.86 = 354.30 euros
   • Type "B" machines:2 machines x 832,60 = 1.665,20 euros
   • Total: 14,159.39 euros

   Quota derived from the simplified regime: the greater of the following amounts:

   1. Current operations accruals:14,159.39 euros

      Current operations supported dues:

      • Amounts paid:9.330,00 euro (*)
      • 1% difficult to justify:141.59 euros
      • 9,471.59 euros
      • Difference:(14.159,39 - 9.471,59)= 4.687,80 euros

      (*) The fees paid for the rental of the premises are fees paid for current operations and are therefore included in the total amount for this item.If the premises were owned, the acquisition costs would be deductible as fixed assets.

   2. Minimum fee: (13% of 14,159.39 euros):1,840.72 euros

      Therefore, the tax payable under the simplified regime is 4,687.80 euros.

      Annual fee:

      • Quota derived from the simplified regime:4,687.80 euros
      • Accrued tax on intra-Community acquisitions of goods (2,500 euros x 21%):525.00 euros
      • Deductible VAT on fixed assets (450 x 21% + 2,000 x 21%):-514.5 euros
      • Annual fee:4,698.30 euros

      Result of the final self-assessment:

      • Annual fee:4,698.30 euros
      • Income on account of the financial year:(462,71 x 3):-1,388.13 euros

      Result of 4th quarter declaration:3,310.17 euros

      (See 4T of form 303)