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Principal new tax developments Introduced by Royal Decree no. 828/2013 of 25 October,

which introduces modifications in the VAT Regulations and in other tax rules (BOE of the 26th).

This Royal Decree modifies the following rules:the Regulation of the Value Added Tax, approved by Royal Decree 1624/1992, of 29 December;the General Regulation implementing General Tax Law 58/2003, of 17 December, in relation to reviews in the administrative channel, approved by Royal Decree 520/2005, of 13 May;Royal Decree 1065/2007, of 27 July, approving the general regulation of tax management and audit procedures and measures, and implementing common rules governing tax application procedures and the Regulation on the duties related to invoicing, approved by Royal Decree 1619/2012, of 30 November.


VALUE ADDED TAX


The first article of Royal Decree 828/2013 introduces the following modifications in Royal Decree 1624/1992, of 29 December (RIVA):

Exemption of the services provided by non-profit organisations:prior recognition.

Article 5 RIVA is abolished to adapt the RIVA to the suppression by Law 17/2012 of the legal requirement of prior authorisation request by the Tax Administration as a requirement for the application of exemptions to which paragraphs 6th and 12th of article 20.One LIVA refer to (services provided by unions or economic interest groupings and by non-profit organisations to their members).

It is deleted from article 6 RIVA the prior recognition of the social character of private organisations or establishments as a requirement for the application of the exemptions included in sections 8th, 13th and 14th of article 20.One LIVA, although they will be able to request, binding in nature for the Administration its qualification as such.These exemptions will be applied as long as the requirements established in the article 20.Tres LIVA are complied with independence from the moment in which this qualification is obtained.

Exempt customs operations.

The articles related to the exemptions linked to customs operations are modified to adapt them to the changes in the applicable procedures:

  • In supplies of goods or provisioning to ships and aeroplanes (article 10 RIVA) the operations will be documented for Customs by the supplier.
  • In operations related to free zones and warehouses and suspension arrangements, regulated in articles 11 and 12 RIVA, the duty to declare to Customs is deleted, establishing the responsibility of the justification of the exemption in the acquirer of the goods or receiver of the exempt services, who will have to deliver to the transferor or provider of the services a declaration signed by him/her stating the location of the goods, for which he/she will be able to use an form available in the Tax Agency's E-Office.
  • Certification of the exemption of imports-related services set forth in article 19 of the Spanish VAT Law on the private relationship between the taxpayer, the importer and the exempt service provider.This justification will be able to be carried out by the contribution of a copy of the import SAD with the secure verification code and the documentation that justifies that the value of the service has been included in the declared taxable base.

Modification of the taxable base for irrecoverable loans and bankruptcy of the recipient.

The new version of article 24 RIVA, in its sections 1 and 2, incorporates the following changes: 

  • The taxpayer is obliged, as condition for the modification of the taxable base, to declare the remission of the rectification invoice to the recipient.
  • FROM 1 JANUARY 2014, the obligation to communicate any changes to tax bases, both for the creditor and the debtor, must be carried out via electronic means, using the specific form designed for this purpose, available in the E-office of the Spanish Tax Agency (AEAT).
  • The documents that come with this communication by the creditor shall be submitted online via the Tax Agency's electronic register
  • In the event of bankruptcy of the operations' recipient (article 80.Three LIVA):
    • The rectification invoices will also have to be sent to the insolvency administrations.
    • The copy of the judicial writ of bankruptcy declaration is eliminated from the documents that must be presented in the Tax Agency accompanying the taxable base modification communication.
    • The recipient-bankrupt debtor will have to include in the tax return-assessment related to taxable events previous to the competition the adjustments derived from those cases in which this party does not have the right to the total deduction of the tax by the not deductible rectified amount and when the settlement period in which the rectification should be carried out is over.
    • NOTE:Law 7/2012 modified article 114.One.2nd LIVA, with the double objective that the recipient of the operations declared the positive adjustment that provokes the rectification invoice in a period prior to the date of the bankruptcy declaration, so that the payable tax derived from the mentioned adjustment had the qualification for the "insolvency loan" and for taking the rectification to the same period in which the recipient-bankrupt debtor had carried out the deduction.
    • It is necessary that the recipient or, if applicable, the insolvency administration presents the rectification in the same deadline as the tax return-assessment corresponding to the period in which the rectification invoices had been received.

New taxpayer reversal scenarios:communication.

In relation to the new taxpayer reversal scenarios introduced in Law 37/1992 by Law 7/2012 in paragraphs e) and f) of article 84.One.2nd (delivery of real properties with renunciation to the exemption, deliveries in execution of guarantee constituted on properties and development of works of urbanisation of land or construction or rehabilitation of properties) a new article 24 quater RIVA is incorporated in which:

  • Specific obligations are established in the communication of employers or professionals that carry out these operations and of their recipients with regard to the requirements foreseen for the application of the taxpayer reversal.
  • These communications must be carried out prior or simultaneously to the acquisition of the goods or services
  • The possibility is established for the recipients to prove, via signed written statement, their adherence to certain circumstances (in their capacity as business owners or professionals with entitlement to a full deduction of the tax paid on property acquisitions and operations carried out within the framework of a land development process or building or renovation project), being jointly responsible for the tax debt in the event that by means of this statement the correct charging of the tax is evaded, without prejudice to the sanctions applicable.

Special scheme on cash basis- RECC.

WITH EFFECT FROM 1 JANUARY 2014:

It adds a Chapter VIII in Title VIII (article 61 septies and following)dedicated to the statutory development of this new scheme introduced by Law 14/2013, of 27 September, supporting entrepreneurs and their internationalization:

  • The terms for inclusion in and withdrawal from the scheme are established. These can be exercised by presenting the census declaration within the corresponding periods.
  • The terms allow for exclusion from the Special cash-accounting regime, with effect in the year immediately after the one in which the limits are exceeded, when the turnover for the calendar year is over €2,000,000 and when total cash collections made with respect to one recipient throughout the entire calendar year is over €100,000.
  • The information to be included in the general ledgers is extended to include references to the collection and payment dates and the method of payment used, for taxpayers included in the Special cash-accounting regime.In the same way, it applies to those not covered by RECC but that are recipients of operations affected by it (art. 63 and 64 RIVA).

It includes a new paragraph 5 article 69 RIVA which specifies that the operations must be recorded in the register books within the time limits as if they had not been applied by RECC, and must be completed at the time in which the charges or payments are carried out.

Bankruptcy declaration situations.

According to the forecast introduced in article 99.Five of Law 37/1992 by Law 7/2012, article 71 RIVA regulates the duty to present two tax returns-settlements, dividing the normal period of declaration into two periods as they may refer to taxable events prior or subsequent to the bankruptcy declaration writ and the possibility of compensation between them.

  • Other modifications
    • The target scope of application of the 4% tax rate is made more flexible, covering acquisition of vehicles for habitual by persons with reduced mobility or wheelchair users, by persons or entities rendering social services to promote personal autonomy and dependency care and social integration of disabled persons as set forth in article 26.bis Two of the Value Added Tax Regulations.In particular, it allows to apply 4% although four years have not passed yet since the purchase of another vehicle whenever it's intended for the usual transport of different defined groups of people or used in different territorial or geographical areas.

      It is specified that persons with reduced mobility will be considered as such if they have the parking card for people with disabilities, provided they receive the certificate or resolution issued by the IMSERSO or the Autonomous Community

    • The simplification of the procedure for exercising the option to apply the special pro-rata rule, governed by RIVA article 28.1, allowing it to be exercised in the final tax declaration-settlement corresponding with the calendar year, while regularising any deductions that occurred during said year.

      The scenarios in which the beginning of the activity or differentiated sector are excluded.

      The exercise of this option links to the taxpayer during three calendar years, considering that the first calendar year corresponds to the one referred to in the option.

      For the financial year 2013 the option will be able to be exercised through the presentation of censal declaration in this year's month of December.

    • Not applying the objective estimate scheme associated with Personal Income Tax, laid out in RIVA article 36.2, will also entail the exclusion of the simplified system for VAT during the same year.
    • The change to the submission period VAT self-assessments, laid out in RIVA article 71.4, eliminating the existing exemption for settlements during July, which taxpayers will pay on 20 August instead of 20 September.
    • The references of the tax Regulation have been adapted to the modifications made in the area of invoicing after the entry into force on 1 January 2013 of the new Regulations governing billing obligations, as approved by Royal Decree 1619/2012 of 30 November.

    INVOICING


    WITH EFFECT FROM 1 JANUARY 2014:

    The fourth article of RD 828/2013 introduces the following modifications to Royal Decree 1619/2012, of 30 November:

    • The exception being in article 3.2 the lack of obligation to issue an invoice in cases of rendering services defined in articles 20.One 16 and 18 of the Value Added Tax Act in cases of operations carried out within the scope of application of the tax, i.e. Canaries, Ceuta or Melilla by business owners other than insurance and credit entities.
    • Articles 6, 7 and 11 include the corresponding references derived from the Special cash-accounting regime (mention of the Special cash-accounting regime (RECC) in the contents of the invoice, issue deadline)

    REFUND OF UNDUE PAYMENTS


    The second article of RD 828/2013 introduces the following modifications to RD 520/2005, of 13 May:

    Article 14.2.c) specifies the requirement that the improperly charged fees have been paid, stating that in cases of self-assessments to be paid without effective payment of the result of the self-assessment, only the improperly charged fee that exceeds the result of the self-assessment pending payment shall be returned.


    ANNUAL DECLARATION OF TRANSACTIONS WITH THIRD PARTIES - FORM347


    WITH EFFECT FROM 1 JANUARY 2014:

    The third article of RD 828/2013 introduces the following modifications to RD 1065/2007, of 27 July:

    Subjective scope (Articles 31 and 32)

    • Communities of goods in a system of horizontal property as well as certain entities or establishments of a socialnature are now included as obliged to present the tax return, with certain exceptions.
    • Taxpayers applying the simplified VAT regime must supply information not only of those operations for which they issue invoices but also of those for which they receive invoices that are recorded in the register of invoices received.

    Content of the tax return (Article 33)

    • Taxpayers who apply the special cash-accounting system and those with whom they have transactions must include in their annual tax return separately amounts accrued during the calendar year in accordance with the general rule of accruals (Article 75 Value Added Tax Law (LIVA)) and in accordance with the criteria of the special system (Article 163.13 Value Added Tax Law (LIVA)).
    • The exclusionary minimum limit of €3,005.06 is eliminated exclusively to oblige the tax return of all the subsidies granted by the different Public Administrations to the same person or entity. 

    Completion (Article 34)

    • In the case of business persons or professionals established in another Member State who do not have a NIF, the value added tax identification number allocated by that Member State must be entered.
    • Transactions involving the application of the reverse charge for VAT, transactions linked to the non-customs</g> warehousing procedure and transactions to which the RECC applies shall be identified separately.
    • It is specified that the obligation to present form 347 by the General State </g> Administration with respect to the operations carried out under the State Expenditure Budget by means of the Direct Payment procedure shall be carried out through the sending of said information in a single and centralised manner through the General Intervention of the State Administration.

    Temporary imputation (Article 35)

    • The information shall be provided exclusively on the basis of its annual</g> computation, in the case of information to be submitted by the subjects covered by the RECC, by the communities of goods under horizontal ownership and, as regards the operations affected by the RECC, by the addressees thereof. 

    DECLARACION INFORMATIVA DE OPERACIONES INCLUIDAS EN LOS LIBROS REGISTRO-MOD.340


    WITH EFFECT FROM 1 JANUARY 2014:

    Section 11 of Article 3 of RD 828/2013 reduces the subjective scope of the obligation to report transactions included in the registers (form 340) to VAT or IGIC taxpayers who are included in the monthly refund register.

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