Regulatory developments 2017

Binding consultation of the Directorate General for Taxation No. V1588-17 of 20 June 2017, on the compulsory nature of VAT Record Books for companies that execute transactions that are exempt from the tax

In the binding consultation V1588-17, of 20 June 2017, the Directorate General of Taxation modified the criterion established in the previous binding response of 26 February 2007, number V0373-07, with respect to the non-obligation to keep record books when:　

-the company is not obliged to issue invoices and　

-the activity carried out is exempt from the tax, and does not have the right to deduct charges borne when acquiring goods and services for this activity.　

The criterion has been modified as a result of the new system for keeping books via the Tax Agency's E-Office (Immediate Disclosure of Information), given that the records contained therein are the foundation of the information to be disclosed. Thus, the new system:　

-Allows for reduced administrative charges associated to the periodical supply of information pertaining to the taxpayer, such as the filing of forms 347, 340 and 390.　

-The information acquired through the electronic supply of invoicing records will be made available to businesspersons or professionals with whom people or companies that keep record books through the E-Office have carried out transactions, constituting an assistance tool for the taxpayer when elaborating their tax returns-settlements for VAT.　

With this binding consultation, the Management Body establishes the following:　

There is no requirement to keep a record book of invoices issued when the consulting party is not obliged to issue invoices for all their transactions, in accordance with the provisions of the Regulation that governs invoicing obligations, approved by Royal Decree 1619/2012, of 30 November (Official State Gazette of 1 December).　

Nevertheless, there is a requirement, in general, for the businessperson or professional to keep a record book of invoices issued, regardless of whether the activity carried out is fully exempt from the Tax and they are not entitled to deduct the charges borne when acquiring goods or services for said activity.　

The record book of invoices issued is kept through the E-Office of the State Tax Administration, when the settlement period of Value Added Tax coincides with the calendar month, according to the provisions of article 71 of the Tax Regulation.　

Furthermore, with respect to summary invoices issued to businesses or professionals, when the recipient of these transactions is a business or professional and is acting as such, and the invoice is issued after the month in which the transactions were carried out and prior to the 16th day of the month after this, the invoice must include its issuance date, even though this is after the end of the month in which the transactions were carried out and before the 16th day of the following month, as well as the date on which the transactions were carried out.