By Josep Bertrán, the Director of the Master in Financial Management at EAE Business School
From 1st July this year, new regulations on immediate notification submission have come into force with respect to VAT.
This requirement applies to all VAT taxpayers under obligation to declare the tax on a monthly basis, which applies to around 63,000 companies.
Any companies with an annual turnover of more than 6 million euros.
All companies registered on the REDEMA (Monthly VAT Rebate Register).
Taxpayers to which this obligation does not apply may also take part in the scheme on a voluntary basis.
The following conditions apply to taxpayers that are under obligation or that sign up to this immediate notification requirement:
They must submit their invoicing records to the Tax Authority’s Electronic Office within four days.
They can submit their regular VAT self-assessments ten days later that the standard deadline.
They no longer have to present Forms 347 (Transactions with third parties), 340 (Record books) and 390 (Annual VAT summary).
For the Tax Authorities, this system taking effect enables it to improve tax control and fight fraud more effectively.
For companies, the implementation of this system gives them a range of benefits, but it also has some drawbacks. Immediate notification submission enables them to streamline fiscal procedures and frees them from the obligation to submit a number of tax forms. It will also mean a reduced time for rebates. Moreover, taxpayers can correct any mistakes without having to receive the order to do so from the Tax Authority.
However, particularly in the case of smaller companies with IT systems that are not really up-to-date, they will have to adapt these systems, which may involve a significant investment.