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What Is The Accrual Criterion In Spain

Accounting obligationsTax Agency (Hacienda)

accrual criterion

It mainly concerns when and how to pay VAT on products or services provided to customers. 

In this article, we will see what it is, its characteristics and the other criteria, the Cash Criterion (“Criterio de caja”).

What do accrual criterion and accrue mean? 

The accrual refers to the taxable event that generates the tax obligation. For example, in the case of the sale of a product, VAT is accrued when the sale is made. 

Therefore, earning is the right that someone acquires to receive an amount of money for a job or service.  

What is the accrual criterion?

The criteria (accrual and cash) are the different ways established by the rule to declare and pay the taxes corresponding to each invoice, both income and expense.

The accrual criterion is regulated in article 19 of the Law of the Imputed Companies and article 14 of the Law of the Tax on the Income of Physical Persons.

The accrual establishes that the period for declaring the billing information coincides with the fiscal period in which they are produced. Once the product has been sold or the service provided, the invoice is declared, regardless of whether it has been collected or not.

Characteristics of the accrual criterion

As we have said, invoices are accrued when they are issued

That creates a problem when we haven’t collected the invoice yet. The invoice issuer has the obligation to pay the VAT that has not yet been paid. On the other hand, the client deducts an expense that has not yet been paid.

It will be more precise with an example

A designer finished the work commissioned by his client on June 25. Issues the corresponding invoice dated June 25 and sends it to the client requesting payment.

The service contract signed with the client established that the invoices would be paid within 30 days. So the designer will have to wait until July 25 to collect his invoice.

But the following inconvenience arises: the amount of VAT on the invoice amounts to €2,100 because it has been a job for several months. In other words, on July 20, he has to pay that VAT on form 303 without receiving the invoice amount. 

What possible alternatives do you have?

  1. The tax regulation, as an exception, allows you to defer the amount of VAT not collected to the date of presentation of the tax.
  2. You can use the possibility of splitting the VAT payment offered by many banks (being able to cancel the credit once you receive the invoice amount).
  3. If the situation is going to occur continuously, you could think about taking advantage of the special VAT regime, the Cash criterion. It has been possible since 2014 as long as you meet specific requirements and conditions.

What is the Cash criterion? 

The cash criterion in VAT works just the opposite of the accrual principle. In other words, with this criterion, invoices are accrued when they are paid or collected instead of when they are issued. 

It is a voluntary regime applicable to all entrepreneurs or professionals and any activity, with exceptions. To take advantage of it, it is necessary to meet the following requirements:

  • Do not exceed 2 million euros in turnover per year. 
  • That you don’t invoice exclusively intra-community companies.
  • Do not exceed 100,000 euros collected per year from the same client
  • The operations are not included in other special VAT regime, such as agriculture. 
  • Declare invoices paid within a maximum period of 4 years
  • An invoice that has not been paid must be declared before December 31 of the year following receipt. 
  • If you use the accrual criterion, you cannot return to the cash criterion until 3 years have elapsed

Disadvantages of the Cash Criterion 

Although for some activities or professionals, it may be an excellent option to use the cash criterion, it also has certain peculiarities that can be negative

  • Administrative complexity. The differences with the accrual criterion make it necessary to have some knowledge about the tax regime. In addition, billing software works with the accrual information, so it is difficult to file taxes automatically. 
  • It is not possible to deduct the invoice until you fully pay it. Strong customers can pressure companies not to take advantage of the cash criterion. 
  • You must provide more information about your company and customers to the Tax Agency. The recipients of these invoices will have to give their data so that they can choose providers not covered by this system. 

For these reasons, most companies choose to stay with the accrual criterion: its simplicity when applying it and to avoid being rejected by some clients. 


In summary, the accrual criterion is the most applied by the self-employed and companies, who declare income and expense invoices in the fiscal period they are issued, regardless of when they are collected or paid.

Alternatively, you can opt for the cash criterion, in which invoices are declared when they have already been fully paid or collected. The administrative and tax complexity involved in applying this criterion means that there are very few taxpayers who opt for it.

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