Simplified VAT and Group of Companies Taxation Systems
Simplified VAT System
Its regulation is in Article 122. Waiver applies unless the subject meets the following requirements:
- Whether individuals.
- That the amount of income does not exceed a certain amount and that their purchases do not exceed a certain amount.
- Develop some of the activities defined in the regulations.
- That has not waived the objective assessment in income tax.
Features of the Scheme
The supplier-contractor and the employer-customer relationship is not a specialty. But, the fees passed on to the calculation of income are determined by objective assessment modules, regardless of their actual amount.
Regarding the Quantification
The first step is to determine the fees payable by the modules and rates approved by the Ministry of Finance annually. These modules are personal, local surface, electric power, electricity consumption, and so on.
Second step, deduction of tax at the current operations in the reverse of last year.
Step Three, deduction for hard to justify which is determined by 1% of tax due.
Respect to its Accrual
Each quarter no duty to enter a part of the annual.
In Terms of Formal Duties
- The duty to bring the book of invoices received.
- The duty to retain supporting documentation for the modules.
- The duty to preserve the invoices.
The central idea of the scheme is the VAT charged to customers does not count the amount of actual cash, but in calculating the fees do not add fees actually passed on VAT but what it does is to calculate the fees passed on through modules, expression designates the Ministry of Public Finance and Economic activity he does. With these modules, calculate your fees payable to the effects of what must be entered in the Treasury. With its employee module and its local area or get a tax due of 100 and in the last year accrual rule says that the input tax deducted in the year. The amount is 1% on fees earned by the deduct what we.
The last element to consider is that each quarter provides a quarterly rate (it says the command module in the example is 0.10) each quarter and pay a 0.10 for that figure. And finally shares less the input tax incurred on purchases less fees already paid in the first 3 quarters.
Group of Companies Taxation System
The regulation is in Article 173. 5-9 in the reform introduced by Law 36/2006.
The group of entities may be taxed in clusters rather than individually by each entity.
Budgets are:
- The concurrence of a parent company and its subsidiaries.
- The headquarters or permanent establishments of every reside in Spanish territory.
- Let there be a resolution of the Board of Directors of each of the entities to opt for the regime. If you exercise the action (opt for the scheme) will be monthly settlement period for companies and for the group, it is clear however, that the group will not be subject to VAT (as opposed to corporation tax).
Obligations of the Entities
- The controlling group holds representation to management.
- The parent has a duty to present the group’s aggregate reverse.
- The parent has a duty to enter the tax group.
- The settlement period will be monthly for institutions and for the group.
- The subsidiaries are jointly and severally liable for the debt of the group.
Analytical Cost Option for Intra-Group Transactions
The group may choose to:
- The tax base in the transactions between entities in the group is carried at the cost of property used.
- By having the right to deduct integrated (total deduction) of the input tax.
- Having the power to waive the exemptions in domestic transactions.
The exercise of this option entails the duty to follow a set of information (accounting) cost analysis to reflect the use of assets.