• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/2/2013

Spain - Proposed decree to amend VAT regulations 

August 1: The government of Spain in July 2013 published a draft of a Royal Decree that, once approved, would change certain value added tax (VAT) provisions.

It is anticipated that the Royal Decree could be finalized by the end of the summer 2013.

Summary of VAT changes

Among the changes to the VAT rules, included in the draft Royal Decree, are provisions concerning:

  • Procedures for the recovery of output VAT as a result of insolvency procedures and with respect to bad debts
  • The adoption of a new special cash accounting regime
  • The introduction of an electronic communication mechanism for informing the tax administration of customs exemptions
  • The repeal of a special deadline for filing VAT returns for July 2013, with returns to be filed between 1 August and 20 August 2013
  • Greater flexibility concerning the reduced VAT rate of 4% with respect to the purchase of vehicles for disabled individuals
  • Simplification of the procedure for companies electing the special pro-rata option
  • Changes with respect to Form 347, concerning the annual summary of transactions with third parties
  • Transactions in free zones and suspension regimes
  • Changes to who must file Form 340, effectively not requiring that all taxpayers file this form by 2014
  • Changes to invoices related to insurance operations, reinsurance and capitalization, and certain financial transactions
  • Changes to the rules for the reverse charge mechanism for certain real estate transactions

Read a July 2013 report [PDF 55 KB] prepared by the KPMG member firm in Spain: DRAFT of ROYAL DECREE which amends VAT Regulations – Yet to be approved.

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