Spanish VAT Recovery Of Employee Expenses Under the SII
You can now claim Spanish input VAT on employee expenses that were excluded from your VAT return following the implementation of the Spanish SII.
7 June, 2018
Together with our local partner, we will process and convert those expenses into valid invoices that you can post in bulk into your system and include in your Spanish SII report and VAT return..
What was the problem with recovery of employee expenses?
The Spanish SII requires all transactions to be reported individually. Even employee expenses have to be booked individually, with a separate posting in your books for each single expense. The administrative cost of this requirement is often higher than the input VAT value, so most companies decided to exclude these expenses from their SII reports and their VAT returns, hence effectively excluding input VAT incurred that could otherwise be deducted in their VAT return.
Employee expenses are normally posted in bulk. In most multinationals, employees upload a list of receipts with the corresponding scanned receipts using tools such as Concur or SAP T&E. These expenses would then be grouped into a total amount and claimed as input VAT (either through the VAT return or an EU Refund claim). On the accounting side, they are posted as one posting for the entire period.
However, with an increased demand of transaction data from the tax authoriteis (SAF-T, SII, Spesometro and others), the level of detail required by the authorities on employee expenses was not available in the ERP of most companies, which consequently excluded this input VAT from VAT deduction.
The solution for Spanish VAT deduction
Our partner will convert all employee receipts into valid invoices. You will receive an Excel spreadsheet in the required format of your ERP system for bulk posting of each individual expenses with a link to the relevant invoice.
The process is as follows:
- Receipts are made available by your company via scanned or physical copies. There are several options to receive these receipts including a Concur connector, cloud based tools or alternative data exchange tools.
- The receipts are processed and data is retrieved
- A contact is made with the supplier to receive a valid invoice.
- A link to the invoice together with the retrieved data is available in the system
- Your team receives a CSV or Excel in the format required by your ERP system to post in bulk all these individual expenses
- Your VAT return and SII report reflects these expenses and input VAT is recovered.
This process can include any employee expenses incurred over the last 4 years, so the opportunity goes beyond expenses incurred during the SII implementation.
For SII purposes, you will be fully compliant because the 4 day time period on AP invoices starts counting from the moment the invoice is posted. We can also assist you posting these invoices using our tool and our manual submission of Excel spreadsheets.
Our partner has more than 10 years of experience and currently processes over 45,000 receipts per day. There are self-invoicing agreements with suppliers for which the data is already available in their ERP system.
Please contact us so we can provide you with more information about this solution and evaluate the financial benefit for your business.