Increase of VAT rates
On 1 September 2012, the general and reduced VAT rates increased to 21 percent and 10 percent respectively. The retailers’ supplementary VAT charge rates and the flat-rate scheme for farmers were also amended.
In addition, some goods and services previously included in the scope of the hyper-reduced or reduced rate, are now subject to the standard VAT rate. Thus now school materials, flowers and ornamental plants, bundled supply of hotel and restaurant services, admission to theatre or circus and other shows, mortuary services, hairdresser services, sport services, certain services rendered by artists, medical and dental care services, digital television services and sales of works of art are now taxed at the general rate of 21 percent.
This latest increase follows another one in July 2010, when the longstanding 16 percent standard rate was increased to 18 percent, and the reduced rate from 6 percent to 8 percent.
New anti-avoidance measures
A new law implementing stricter antiavoidance measures is currently under discussion. The draft law introduces certain modifications to Spanish VAT law aimed at avoiding fraudulent behaviors, particularly for operations relating to the transfer of real estate and where one of the parties went bankrupt.
Firstly, a reverse charge mechanism would be implemented when the exemption relating to the transfer of real estate is waived and when the transfer of real estate occurs due to the foreclosure of a guarantee.
Secondly, in bankruptcy situations, new measures would allow the tax authorities to collect any VAT receivables and consequently ensure VAT neutrality. Finally, failure to submit the appropriate declaration for specific imports-related operations would be subject to penalty regulated by the law.
Modifications on invoicing regulations
Effective 1 January 2013, a Royal Decree approving regulations on invoicing requirements will enter into force. The new regulations will implement EU Directive 2010/45/UE in the domestic legislation.
These modifications are largely intended to simplify invoicing requirements and align – as far as possible – procedures for paper and electronic invoices. Two of the amendments, for example, relate to certain financial and insurance transactions where invoices are no longer required if the counterparties are located outside Spain but within the EU. Furthermore, the procedures for issuing an invoice and for self-billing will be simplified.
The most important development is the introduction of the so-called ‘simplified invoice’, which will replace tickets and short invoices in certain situations. Lastly, the deadline for issuing invoices will be modified to the 16th of the month following the month where VAT was due.