Important changes to IVA invoices as from next year – the cash basis IVA scheme

In September 2013 a new tax law was introduced in Spain which changes the way businesses can claim back IVA (VAT) on invoices issued and pending.

The law is known as Ley 14/2013, de 27 de septiembre, de apoyo a los emprendedores y su internacionalización (Law 14/2013 of 27 September, support for entrepreneurs and internationalization), whose importance I believe may be of interest.iva

In short, the new system allows those businesses that have registered under the new scheme with the Tax Office to delay the payment of VAT on invoices until the invoice has been settled, instead of the current system in which VAT is due in the tax period when the invoice is issued. However, if you purchase from a company registered under this scheme, you cannot deduct the VAT from your invoice until the bill has been settled in full!

Please read this circular because even if you or your company is not benefiting from the cash basis VAT scheme, you will be forced to treat your suppliers or creditors who are registered under this scheme in a different way (see notes 8 and 9)!

Cash Basis VAT – An overview of the new law, and what it means for your business.

©2013 All rights reserved. This is not a legal advice article. The information provided here do not constitute legal advice and are not intended by the authors to do so. Persons in need of legal advice related to this subject should contact an accountant who is qualified to advise or a lawyer who is qualified to practise in this area. In seeking legal counsel in any of the areas discussed in the article, consumers should carefully select the professionals they choose to represent them in such legal matters and are solely responsible for this decision.

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