Spanish import VAT deferral and postponed VAT accounting
Spain has introduced the simplification of postponed import VAT accounting. This regime consists on applying reverse charge on import VAT amounts.
Normally, companies must pay VAT upon importation and they are able to deduct this VAT only when the VAT return is filed. Postponed import VAT allows for payment and deduction in the VAT return, with nil cash flow impact. Effectively, this is a reverse charge mechanism on import VAT.
Spanish import VAT deferral is only allowed for businesses filing monthly VAT returns. These are companies with a turnover above 6 M €, companies registered in the Monthly Refund Registry and VAT groups. The application must be filed within the month of November prior to the year in which the simplification will apply. For example, if your business would like to benefit from this simplification as from 1st January 2019, you must file your application between 1st and 30th November 2018. Additional formalities must be met.
Import VAT deferral allows import VAT to be paid at a later stage. Some countries allow a period of up to 40 days to make the payment after the importation is made.