Cash-basis accounting in VAT and other news
With the Entrepreneurs Law, a cash-basis accounting scheme, widely called for by small and medium-sized enterprises was introduced into VAT legislation with effect from 2014, against the backdrop of growing collection difficulties. The scheme will allow VAT to be paid over when it is collected from customers.
The scheme is optional and only traders or professionals with an annual turnover of less than €2 million will qualify for it. However, the impact of its application will be felt by the customers of those transactions, because their right to deduct will be delayed until the VAT is paid and they must also fulfill additional formal obligations.
Regulations have recently been made to implement the scheme and other changes to the VAT Regulations have been introduced in relation to matters such as the formalities for new cases where VAT liability is reversed, the election to apply the special deductible proportion rule, the obligation to provide evidence that correcting invoices have been sent or VAT assessments in the context of formal insolvency proceedings.
To examine the scope of the scheme, Garrigues has organized various informative sessions in Madrid, Barcelona and Valencia, at which we will be able to call on the expertise of distinguished speakers from the tax authorities.
Garrigues Tax Department