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SII obligations vs VAT financial costs. Time to decide

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Manuel Pérez de Algaba

Miércoles, 20 Noviembre 2019

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The obligation to comply with the Spanish “Immediate Information Supply” (SII) affects those companies operating in Spain having to file VAT returns on a monthly basis. Such is the case for those with a turnover higher than 6 million Euros during the previous calendar year, the so called “big companies”. The outcome is their obligation to provide the tax authorities electronically with the data of the transactions booked at the VAT registers within the 4 calendar days following the issuing date (sales invoices) or the accounting date (received invoices).

Having to comply with such a tight schedule is seen as a burden to be avoided by those companies filing their VAT returns on a quarterly basis and, as a result, outside the scope of the SII. However, this conclusion must not be accepted at face value since there could be situations where having to comply with the SII obligation is just a small price to pay for obtaining significant financial savings.

Such could be the case of non-established multinationals operating in Spanish which, due to their operative, have not Spanish VAT payable meanwhile incurring significant input VAT and, as a result, are in a recurrent Spanish VAT receivable situation.

This situation is not so rare as it may seem, given the reverse charge rule applying to B2B local sales when the supplier is a non-established. For this case, should the non-resident company incur Spanish VAT in its local purchases or imports, along with exempt transactions which jeopardize the possibility to benefit from the special non-resident VAT refund regime of Directive 2008/9/EC, the company could apply for the refund of the incurred input VAT until the last quarterly VAT return. When the amounts are significant this would mean a heavy financial impact on the company.

For this scenario the possibility to apply for the special monthly refund regime by registering at the so called REDEME (Register of Monthly Refund) could be an option, having in mind that the price to pay would be the triggering of the obligation to also comply with the SII obligations.

In practice, depending on the number of transactions and business flows of the company, the compliance with the SII reporting obligations must not necessarily involve much additional administrative work that the one required by the filing of the VAT returns and keeping of VAT registers. Furthermore, the outsourcing of such SII obligations can be a suitable option which cost could be more than justified by the financial savings obtained.

Furthermore, those companies with monthly VAT returns obligation, when importers, are also eligible for the special import VAT deferral regime, which would allow the payment of import VAT quotas by their inclusion on the corresponding monthly VAT return (plus/minus) with no financial incidence.

Let us mention that November the 30^th is the deadline for companies to apply for the inclusion in the REDEME since the 1sr January and so start benefiting from the special monthly refund regime since this date. So, time to decide.