The countdown towards the implementation of the Immediate Information System has begun. For this reason, the activity around this new system has been significantly intensified …
The countdown towards the implementation of the Immediate Information System has begun. For this reason, the activity around this new system has been significantly intensified in the past weeks.
The effective date when this new system will come into force will be January 2017. The Spanish Tax Authorities are having regular meetings with companies, software suppliers and VAT advisors like SPANISH VAT SERVICES where all the concerns, burdens and difficulties from companies are being presented.
This revolutionary system will imply that companies will have to provide the Tax Authority with very detailed information about their invoices issued and received in real time (within 4 days following when the invoices have been issued or received). In practice, this could entail that companies with a large amount of invoices will have a weekly VAT reporting obligation with their Tax office.
This new system will be mandatory for companies filing VAT returns on a monthly basis (the standard VAT liquidation period in Spain is quarterly). These are the so called large tax payers but also companies applying for the refund on a monthly basis (companies importing goods into Spain on a regular basis or in a continuous credit position with the Spanish Administration may be within this category of companies) and also companies belonging to VAT groups. It is expected that around 62,000 tax payers will be directly affected by this measure. However, companies can voluntarily join this system. Therefore, the real impact of this measure is still unknown.
Companies implementing this system will no longer be obliged to file annual VAT summary returns. Additionally, the deadline for filing their VAT returns will have an extension of 10 days.
It must be reminded that companies not complying with this new information system will be fined. Specific penalties will be approved for this infringement for which companies with VAT reporting obligations in Spain must amend their ERP tools as soon as possible.
It can be said that this is the most challenging change that has occurred in the last years in Spain affecting the management of VAT compliance. For this reason, the Tax Authority is working very closely with all parties affected by this significant change and it is expected that the definitive legislation (we are now working with draft legislation) and also pilot software will be provided in the short term.
Spanish VAT Services