Simplified Corrective VAT Returns in Spain By September 2024
New simplified method for corrective VAT returns in Spain in favor of the taxpayer, effective as from September 2024 reporting period. The updated VAT return form is available.
Simplified Corrective VAT Returns in Spain
The Spanish administration has introduced a new mechanism for corrective VAT returns aimed at simplifying the process of rectifying errors in tax declarations. This innovative approach will replace the prior administrative procedures, offering taxpayers a more intuitive and streamlined method to correct inaccuracies. The change aims to address the corrective returns for several taxes, not only VAT, but also income tax, coporate tax and some other taxes.
The new method for VAT has already been updated in the implementing regulation. Also, the Spanish authorities have published on 5 August the new template form for VAT returns, the Spanish modelo 303, adapting it to the new correction method. In this regard, the changes on the forms involve the addition of new box 108 concerning corrections where there is a discrepancy with administrative criteria, and box 111 to request the refund of VAT as a result of the correction.
Also, the official developers website has been updated accordingly.
The full implementation is expected for September/Q3 2024 reporting period. It is important to consider that the new method is not applicable backwards, i.e., due to technical difficulties, the old system will continue to apply to previous reporting periods even after September 2024.
What are the Mechanics of the New Corrective VAT returns?
The new method for corrective VAT returns, in Spanish declaraciones rectificativas, will empower taxpayers to rectify, complete, or modify their previously submitted VAT returns, always in the same way and regardless of its outcome.
At the moment there is a dual system in place for making corrections. Whenever you need to correct a VAT return already submitted in Spain, you should follow the corresponding method depending on what you need to correct:
- If the VAT position is increased after the correction, then you need to file a new VAT return replacing all data of the previous return needs to be submitted. This method is known as "Declaración complementaria".
- If the VAT position is decreased or does not change, then you would need to initiate an administrative procedure, sending a letter to the tax authorities explaining what needs to be corrected and requesting the refund of the additional VAT paid.
The latter method will be replaced by the new corrective VAT return system. Therefore, where the correction is in favor of the taxpayer -for example, a reduction in the final VAT position-, instead of initiating a complex administrative procedure to correct the return, the taxpayer will be able to simply prepare and submit a new VAT return with corrected data, using the same VAT form employed for the original submission. The correction will be valid as from the submission deadline, without the need to open a new procedure, which will save time solving those mistakes.
Nevertheless, in certain cases, namely for the correction of VAT unduly passed on to other taxpayers, the obligation to request the correction through the traditional administrative procedure is maintained.
Have a look at our VAT manual for more information about the current methods for correcting VAT returns in Spain.
Once the new method comes into force, both methods will be equivalent, although we will continue to refer to declaraciones complementarias – first method-, and declaraciones rectificativas, the second new method.
Corrective VAT returns in Spain can be submitted both within and outside the reporting period.
This method aims to simplify the processes both for the tax administration and for taxpayers. Nevertheless, some stakeholders, like the Spanish association of tax advisors (AEDAF), warn about the possible loss of guarantees for the taxpayers. Considering that the VAT refunds will be automatically processed upon the submission of the corrective VAT return, it is more likely that the tax administration carries out verification procedures afterward and, in case of not agreeing with the taxpayer’s calculations, penalties are applied.