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.
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.
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