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VAT and Personal Income Tax investment goods register
The current regulations define the content that these Registers must have (Article 65 of the VAT Regulations and Article 4 of Order HAC/773/2019, of 28 June) and the new standardised format is limited solely and exclusively to defining how to present the information when required by the Tax Agency.This standardisation does not change the criteria in relation to compliance with these formal obligations, rather it is the result of applying the tax assistance strategy with a view to generating certainty for taxpayers and speeding up the processing of their refunds when they are subject to verification.However, in doing so, the Tax Agency does not define the organisational measures that, where appropriate, should be adopted to comply with these tax obligations, which, once again, have not been modified.
For example, and in response to the aforementioned columns, in the case of the VAT Investment Goods Register, with a view to regularising deductions for investment goods, pursuant to the provisions of Articles 107 to 110, both inclusive, of the VAT Law, it must be considered that the time period in which they can be applied differs depending on the type of goods (real estate, Article 107.three, and other investment goods, Article 107.one).VAT taxpayers who are subject to the pro rata rule (i.e. who may have to practice the adjustment of deductions for investment goods) must identify the Type of Asset to correctly maintain the VAT Investment Goods Register.
Likewise, the last paragraph of article 4 of Order HAC/773/2019, of 28 June, which regulates the keeping of the registry books for Personal Income Tax, indicates, when referring to the entries in the Investment Asset Registry Book, that "The cancellation of the asset or right shall also be recorded with an expression of its date and reason".
VAT taxpayers who are subject to the pro rata rule (i.e. who may have to practice the adjustment of deductions for investment goods) must maintain the VAT Register of Investment Property.The details of a capital good shall be entered in that book only when the adjustment of the deductible amount of the good is appropriate.
However, in the Personal Income Tax Register of Investment Property Book, the property must be registered during its entire useful life.
Thus, those taxpayers who choose to keep the personal income tax and VAT books together (Article 12 of Order HAC/773/2019, of 28 June, which regulates the keeping of personal income tax books) will register the goods throughout their useful life, although the exclusive fields for VAT (columns for the “Year of commencement of use” and the “Annual adjustment”) will only be reported for those years in which it is appropriate to make the adjustment of the deductible amount of the goods.
The year and period columns refer to the self-settlement/payment by instalments in which the line of the entry has been applied.Where a joint VAT and personal income tax entry corresponds to a different self-assessment period, the VAT entry shall take precedence;i.e. the content that would correspond to the VAT-only entry shall be entered.For personal income tax-only entries, the personal income tax criteria shall be applied.
In the example given, let us assume that the VAT taxable person is subject to the pro-rata rule (i.e. he may have to carry out the adjustment of deductions for capital goods) and furthermore the adjustment is due in both 2020 and 2021;in such a case, there shall be 2 entries, one in 2020-4T and one in 2021-4T corresponding simultaneously to the adjustment of the VAT deduction and the income tax depreciation due in each financial year.The Capital Goods Register will not be recorded at the time of the acquisition, rather when:
Regularising the VAT deduction,
Depreciating personal income tax and
Derecognising the investment asset.
It may be the case that the entry is exclusively for personal income tax.
An entry is made in the Investment Assets Register at IRPF for each period and asset for which depreciation allowances are to be made in the year.
On the other hand, the entries of expenses for allocations of the year for depreciation of tangible fixed assets in the Personal Income Tax Purchase and Expenditure Book can be made separately for each asset or cumulatively for all assets, provided that the "Deductible Expense" of the cumulative entry coincides with the sum of the contents of the "Resulting Expense - Depreciation" of all the assets listed in the Investment Asset Register Book.
With regard to these entries of expenses for depreciation of tangible fixed assets in the Purchase and Expenses Book, you should take into account what is indicated in consultations 134591 and 137211 of INFORMA.
Therefore, if you choose to make quarterly entries in the Investment Goods Register, you must distribute the "Resulting Share - Depreciation" proportionally among the periods in which it is applicable, taking into account the incidence of the fields "Date of Start of Use" of the asset and "Date - Cancellation of the Asset" when they have content.The proportional distribution will be obtained by multiplying the annual "Resulting Share - Amortisation" by the result of dividing the number of days it has been in use during the quarter by the number of days in the year.