Do Not Forget to Check Your Expense Invoices
In other articles of our blog, we have talked about the information that an invoice must contain to be valid. Here we are going to focus on what to do if the invoice did not comply with the standard and in a tax check, the Treasury decides that you must return the VAT.
In addition to not forgetting to ask for an invoice whenever you are acquiring a good or service necessary to obtain your income, do not forget to check that the invoice issued by your supplier is well prepared and meets all the requirements:
1. Invoice number.
2. The date of issue.
3. The seller and buyer tax information (name, TIN and address).
4. The description of the operation.
5. The financial information: Tax base, VAT rate and tax rate.
If when checking it you detect that something is missing or some information is wrong, do not even think about it, talk to your provider and have them correct it. So that, in case of verification, the Treasury won’t consider that VAT fee as non-deductible.
What can you do when it’s late?
The Tax Treasury starts a VAT check, and in it, they detect an invoice for an important expense (imagine an expense of € 50,000 where the VAT amounts to € 10,500) where the supplier’s TIN is wrong. In the settlement proposal, the Tax Agency reduces your deductible VAT because they consider that the invoice does not meet the requirements to deduct that VAT.
STEP 1. Ask your supplier to issue a rectified invoice correcting the mistake.
Present it to the inspector as soon as possible alleging the following TEAC (Central Economic-Administrative Court) criteria:
“This Court recognizes the possibility of correcting certain formal requirements of the invoice, provided that the issuer of the invoice carries out such correction.”
STEP 2. What do you do when the inspector considers the VAT deductible from that rectifying invoice, but not with a retroactive effect?
That is, they will continue to regularize the VAT return affected by the original invoice, even though you can deduct that VAT from now on.
That is inconvenient because you will receive a settlement requesting you to pay the extra VAT you deducted (imagine that the invoice is from a year ago), having to face a totally unfair settlement.
How can you defend yourself?
Well, you have three arguments:
1. The European Court (CJEU 15-9-16, case C-518/2014) has considered that the rectification of the formal defects of an invoice has retroactive effects, so the right to deduct it exists from the date on which the operation occurred.
2. VAT cannot be a higher cost for the employer, so if you cannot exercise your right to a deduction from the date of the operation, the principle of neutrality is being violated.
3. Intenta aportar cualquier medio de prueba con el que puedas demostrar la realidad de la operación, de esta forma, el que falte algún dato en la factura no debe ser considerada causa suficiente para denegar la deducibilidad del IVA.
4. Try to provide any means of proof with which you can demonstrate the reality of the operation. In this way, any missing information on the invoice should not be considered sufficient cause to deny the deductibility of VAT.
Tags: deductible expenses freelancers Spain, deductible VAT, expenses entrepreneurs, expenses freelancers Spain, invoice, non-deductible VAT Spain, requirements invoice Spain, Spanish VAT for freelancers, valid invoice Spain, VAT and freelancers Spain, VAT and self-employed Spain, VAT in Spain