FAQs

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 June 28, which regulates the keeping of registration books in the Personal Income Tax, indicates, when referring to the annotations in the Investment Assets Registration Book, that "The deregistration of the asset or right will also be recorded, stating 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 presented, let us assume that the VAT taxpayer is subject to the pro rata rule (that is, that he may have to regularize deductions for investment goods) and that said regularization also applies both in 2020 and in 2021; In this case, there will be 2 entries, one in 2020-4Q and another in 2021-4Q corresponding simultaneously to the regularization of the VAT deduction and the amortization of personal income tax that correspond to each 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.

In the Investment Assets Registry Book of IRPF an entry is made for each period and asset for which provisions for the year will be made for its amortization.

For their part, the expense entries for provisions for the year for the amortization of tangible fixed assets in the Personal Income Tax Purchases and Expenses Book can be made separately for each asset or accumulated for all assets, provided that the "Deductible Expense" of the accumulated entry coincides with the sum of the content of the "Resulting Quota - Amortization" of all the assets listed in the Investment Assets Registry Book.

Regarding these expense entries for provisions for the year for amortization of tangible fixed assets in the Purchases and Expenses Book, you must take into account what is indicated in queries 134591 and 137211 of INFORMA .

Therefore, if you choose to make quarterly entries in the Investment Assets Registry Book, you must proportionally distribute the “Resulting Quota - Amortization” between the periods in which it is applicable, taking into account the impact of the fields “Start Date of Use” of the asset and “Date - Derecognition of the Asset” when they have content. The proportional distribution will be obtained by multiplying the annual “Resulting Quota - Amortization” 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.