Spain Change In Tax Legislation: Cash Basis VAT
Last updated on SEPTEMBER 14, 2016
Applies to:Oracle Financials for EMEA - Version 220.127.116.11 and later
Information in this document applies to any platform.
Spanish 2014 Fiscal Changes
As a result of the present crisis and with the objective of facilitating the
creation and operation of mid and small sized companies in Spain, Law Number
14/2013 of 27 of September of 2013 has been issued in order to support
entrepreneurs and their internationalization.
This law contains the following changes:
1) Entrepreneurial training
2) New company type: Entrepreneurial Limited Responsibility, whereby
individual entrepreneurs can protect their home / residence from being
confiscated due to debts incurred, always under certain conditions.
3) New company type: Limited Responsibility Society of Subsequent Creation,
whereby a limited responsibility company can be created without the
contribution of the minimum mandatory 3,000 Euros, temporarily and under
4) New company type: A Student Company, can be created very easily and can
perform transactions up to one year, extendable to 2 years.
5) Extrajudicial debt resolutions, whereby parties can resolve debt
controversies by means of Notaries or Mercantile Registrators, instead of the
traditional more costly and time-consuming judicial system.
6) Optional Cash Basis VAT for parties with an annual turnover up to
2,000,000 Euros. Based on the EU Directive 2006/112/CE of 28 November 2006,
article 167 Bis, effective since January 1st, 2013. VAT can be settled
(accrued) based on the collection date (as long as it is collected by 31
December of the following year that the transaction took place). Customers
must also delay settlement in the same manner. Opting for cash basis VAT
implies it must be applicable to ALL transactions except intracommunitary and
certain special regime transactions.
7) Special corporate tax of 15% for profit amounts re-investment in new
assets and fixed capital, only for small and mid sized companies
8) Deductions for R&D investments
9) Other changes to assist activating the economy, with no impact on ERP¿s,
especially for small and mid-sized companies.
Cash Basis VAT.
Cash Basis Vat has been added to the Spanish Law of VAT in Title II, Article
23, of the Law Number 14/2013 of 27 of September of 2013. The new Chapter 10
includes the details of this VAT Type.
Conditions and details:
- Can be applied by parties with an annual turnover for the former fiscal
year under 2,000,000 Euros.
- If the optional cash basis vat is adopted, all transactions must use this
vat type, EXCEPT certain special regimes, exempt regimes, intracommunitary
purchase of goods, imports, and certain other types listed in articles 9.1
and 12 of this law.
- The repercussion of the tax must be created when the invoice is created or
handed in, but will be understood effective when the transaction is paid
- The right to deduction of the tax amount is when the transaction is paid or
on December 31st of the following year when the transaction was performed
- Those that do not belong to this regime but that purchase from a party that
does, cannot deduct the tax until payment or December 31st of the following
- The same is applicable to the IGIC (Canary Island Indirect Tax)
ADDITIONAL DETAILS YET TO BE PUBLISHED BY THE SPANISH TAX AUTHORITIES
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