The taxable person’s reversal of the VAT is very frequent.
The Spanish taxpayer is under the impresion that he is paying too much in taxes. And the Spanish (and European) government has the feeling that Spain collects too little. One of the causes of this strange disagreement is the regulation of VAT and reduced and super-reduced rates.
But before analyzing how it works, we want to make a point about this tax. It does not affect consumers. It only applies between a supplier of goods or services and a businessperson or a professionalContacto No te quedes con la duda, contacta con nosotros. Estaremos encantados de atenderte y ofrecerte soluciones.
However, how exactly does this work?
The reversal of the taxable person causes the recipient of the transaction to be considered a new taxable person. That is, one company requires another for a service. The investment is made in such a way that the company that buys and not the provider would be liable to pay tax. This disregards the structure of VAT, since it has always been passed on to the final consumer. The formula of the reversed VAT has several requirements that will be of obligatory fulfillment:
An invoice without VAT will be issued by the provider
- This invoice must necessarily state that it is a reverse transaction by the taxable person.
- This will be done under the terms of article 84 of the LIVA 37/1992, with express mention of the reversal of the taxable person.
- After that, it will be the person who receives the VAT, that is, the taxable person, who will pay the corresponding amount.
Furthermore, the Law establishes when this special VAT must be accrued:
- When the operation is performed.
- In cases of payments in advance of the transaction, the tax will be accrued at the time of total or partial collection of the price.
Si te ha interesado este artículo no dudes en leer:
Why is it done for?
The aim of this rule is to avoid professionals or businessmen having to pay VAT in a country other than their country of tax residence. In addition, it will reduce bureaucracy between all parties.
Which are the transactions affected?
Although it seemed to have a general application, the Tax Office has been limiting this aspect. They are also included in article 84 one, 2º of the LIVA. It will only affect the cases detailed below:
- The operations made by professionals or businessmen not residing in the territory where the tax applies.
- Those operations involving the delivery of raw gold or semi-manufactured gold products, equal to or exceeding 325 thousandths.
- Delivery operations of: (i) new industrial waste, foundry waste and scrap, residues; (ii) cutting operations, selection of paper, cardboard or glass waste.
- Greenhouse gas emission rights.
- Operations of Real Estate deliveries made as a result of bankruptcy proceedings.
- Also operations of execution of work with or without contribution of materials, as well as transfers of personnel.
- And, operations of deliveries of silver, platinum and palladium, raw, powdered or semi-worked. And, resale of cell phones, video game consoles, laptops and digital tablets.
These types of actions are increasingly frequent in cases where an entrepreneur buys for the purpose of reselling. It is important to note that the investment of VAT will not exempt any subject. Moreover, and contrary to the assumption of many businessmen, we are facing a legal obligation. Each invoice must be accepted if it involves this mechanism of imposing VAT.
If this article has been of interest, we also suggest you to read the following article published on our website: Recovering VAT from a credit