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Fiscal Year 2020

4. The tax over the value added

VAT collection decreased by 11.5% in 2020, to 63,337 million, which represented a loss of more than 8,000 million compared to the income achieved in 2019.

The effects of confinement and other restrictive measures, as well as limitations on mobility, had a strong impact on the evolution of gross VAT, which fell by 9.4% (Table 4.2). The trajectory of gross income, as it is not affected by returns, which include requests corresponding to 2019, better fits what happened throughout the year, with an abrupt drop in the second and third quarters, followed by a rebound in the final part of it. In the recovery of income in the last months of 2020, those from the largest requested deferrals, linked to the measures intended to facilitate compliance with taxpayers' tax obligations, were of particular relevance. For their part, refunds fell at a slower rate (-4.1%), as a large part of the largest monthly requests from the previous year were paid in 2020, which explains why the fall in net income exceeded that of gross income.

final expenditure subject to VAT fell by 13.3%, seventeen points below the increase recorded in 2019 (Table 4.1). The decline is consistent with the general slowdown of the economy, in a context of practical price stability.

The spending component that was most clearly affected by the pandemic was household consumption spending, which decreased by 16.3%. Both the confinement and other restrictions intensely limited this component, widening extraordinarily the differential between the evolution of the gross income of households and their consumption spending (Graph 4.1). This fact caused its weight over total subject spending to lose three points in 2020 compared to the average observed in the previous four years (Graph 4.2). The expenditure of the AA.PP. It was the only component that showed a positive evolution, growing up to 4.4%, a consequence of the greater disbursement associated with facing the effects of the pandemic. For its part, spending on new housing fell by 5.7%, losing almost eleven points compared to 2019, a year that closed with a growth of 4.9%, after registering a significant slowdown compared to the growth of previous years. , showing a consistent trajectory with that observed in the transmissions of new housing.

The effective rate of VAT remained practically unchanged for another year (-0.4%), with no notable changes since the last increases in the general and reduced rates in September 2012 (Table 4.1 and Graph 4.5). There were regulatory changes that affected the rate in 2020: type 0 on essential health materials to combat COVID 19 and super reduced rate on books, newspapers and digital magazines. But its impact, valued at a loss of 301 million (Table 1.5), was not enough to significantly influence the evolution of the average rate.

Consequently, the VAT accrued in the period decreased by 13.6%, three tenths more than the subject expense. The net VAT accrued (which differs from the previous one because it includes the variation in the balance that companies leave to compensate from one year to the next) fell a little less, by 13.4%.

Gross accrued VAT decreased by 10.8% (Table 4.2), showing a smaller deceleration than that recorded by net accrued VAT. Thus, in 2020 the gross VAT / accrued VAT ratio increases compared to the ratios observed in the previous five years, a period in which they remained stable, since Customs VAT began to be settled in 2015 through self-assessments (Graph 4.3).

The drop in gross accrued VAT was more intense in the quarterly returns, associated to a greater extent with activities most affected by the slowdown in activity and consumption: from 3.8% reached in 2019 to -11.5% in 2020. For their part, monthly declarations, which group together Large Companies, groups and other operators covered by the monthly refund and import VAT regime, decreased by 10.4% (3.4% in 2020).

Gross income fell 9.4%, almost a point and a half less than the gross VAT accrued. There are several reasons that explain this smaller decrease. On the one hand, the mechanics of the tax itself, which shifts the income of the quarterly declarations corresponding to the accrual of the last quarter of 2019 (not affected by the COVID 19 crisis) to the first quarter of 2020, to which is added that, since the entry into force of the SII, most of the monthly declarations shift their cash income by two periods. That is, practically all of the income for the first quarter of 2020 corresponds to accruals from 2019. And part of the income for the second quarter of 2020 is associated with accruals not yet affected by COVID. This gap between the accrual to be deposited (not including postponement requests) and the accounting of its cash receipt is clearly seen in Graph 4.4, which shows the different quarterly evolution of both series, and explains that the annual fall of the former will reach 11.9%, compared to -10.7% of income (Table 4.2; Chart data can be downloaded at this link ).

The other reason for the smaller drop in gross revenue lies in the notable increase in collection linked to the greater deferrals requested (13.6%).

Refund requests were also affected by the economic environment, and fell by 2.9% in 2020 due to the decrease in monthly requests (more related to exports), which after three years of average increases close to 7%, decreased by 4.4%. For their part, annual refund requests (more linked to the reduced rates at which smaller companies sell) grew by 2.9% (Table 4.2).

VAT refunds fell by 4.1% in 2020 (-1.3% for annual refunds and -3.1% for monthly refunds). The drop in annual returns is due to the lower amount requested for the 2019 financial year, most of which were paid in 2020, with a faster completion rate than the previous year. In the case of monthly returns, the decrease is explained both by the lower amount requested in fiscal year 2020, to which is added a slower rate of realization, and by the lower amount paid in fiscal year 2019, after the advance payment of these requests reached the previous year. Refunds due to regional adjustments also decreased significantly (-16.3%), weighed down by the halt in activity.