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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.
In addition, the last paragraph of Article 4 of Order HAC/773/2019 of 28 June, which it regulates the keeping of the books recorded in the Personal Income Tax, indicating, when referring to the entries in the investment Goods Registry Book, which "The removal of the asset or right will 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 proposed, let's assume that the VAT taxpayer is subject to the pro rata rule (i.e. that it may have to regularise deductions for investment goods) and that adjustment is applicable both in 2020 and 2021; In this case, there will be 2 entries one in 2020-4T and another in 2021-4T corresponding simultaneously to the regularisation of the VAT deduction and the amortisation of the corresponding Personal Income Tax 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.
The Personal Income Tax Investment Property Register Book contains a entry for each period and for which provisions are to be made for the year for depreciation.
Meanwhile, the expenditure entries for the financial year for depreciation of tangible fixed assets in the Purchasing Book and Income Tax expenses may be done separately for each good or in a cumulative manner for all goods, provided that the "Cost of the seat" accumulated match the sum of the content of the "Resulting Fee-Amortisation" of all the assets listed in the Investment Goods Register Book.
With regard to these expenditure entries for the financial year for depreciation of tangible fixed assets in the Purchasing and Expenses Book, you must take into account the provisions of consultations 134591 and 137211 of the INFORMA.
Therefore, if you opt to make quarterly entries in the Investment Goods Register Book, you must distribute proportionally the "Fee result-Repayment "between periods in which it is applicable taking into account the incident of the" Start Date of Use "of the good and" Date-Cancellation of the Item "fields when they have content. The proportional distribution will be obtained by multiplying the annual "Resulting Fee-Amortisation" by dividing the number of days that have been in use during the quarter by the number of days that the year has.