3 months later Spain’s SII Real-Time Reporting Rollout continues

Brian Elswick
November 9, 2017

Several modifications to the Spain’s SII Real-Time Reporting mandate are expected to go into effect during 2018 and beyond. We already announced that SII will expand to Basque Country and Navarra on January 1, and now we’re anticipating additional changes to launch simultaneously

 

Annual Reports due by January 30, 2018.

SII reporting obligations for 2017 do not end December 30. Companies subject to the SII will be required to submit annual information by January 30, 2018 related with:

  • – cash transactions above 6,000 EUR with the same person
  • – insurance transactions (Insurance companies only)
  • – purchases corresponding to provisions of air transportation of passengers and their luggage (Travel agents only)
  • – “Capital Assets”, which intends to inform the AEAT about all the changes in the fixed assets accounts that taxpayers – under the pro rata regime – have had during the previous fiscal year 2017. As it happens in many other countries, under the current tax laws of Spain the immediate deductibility of VAT paid in capital assets is not allowed. Therefore, businesses that purchase these kind of goods, are required to report this ledger where they inform current status of the capital goods accounts and the amount of VAT credits that they are allowed to apply.  

 

SII Enhancements in July 1, 2018.

The AEAT, Spain’s tax authority, has proposed several amendments to SII. When approved, these are also slated to go into effect on July 1, 2018. These changes will correct challenges with the existing system and address recommendations from the first quarter of the mandate’s implementation.

Some of the changes to expect include:

  • – a new field for Taxpayer Identification Number in the ledgers of sales and purchases for the succeeding entity in the event of restructured corporate operations
  • – additional markers to identify qualifying simplified invoices within the codes corresponding to the complete invoice and complete invoices where it is not mandatory to identify the purchaser
  • – a marker in the Ledger of Issued Invoices to identify invoices issued by third parties
  • – a new code to identify the methods or means of collection / payment to identify those conducted through direct debit orders
  • – an additional field of free content called “external reference, where companies can include internal information related to the transaction
  • – an option that allows breakdown of the exempt amount depending on the different causes of exemption
  • – a new XML scheme for taxpayers that issue invoices with more than 15 cadastral references
  • – renamed tags to provide greater clarity and legal precision

Additionally, taxpayers that become obligated to comply with SII during the course of a fiscal year (i.e., those that reach the thresholds outlined here) will now also have to submit the invoicing records corresponding to the fiscal year prior to their inclusion in the SII regime. This process will require significant, detailed record keeping for all businesses.

 

Potential Expansion of Scope in 2019

Taking into account the first results of Spain SII, it can be considered a success as evaluated against both adoption rates and the resulting level of VAT Reporting Compliance:

  • – the compliance rate is in excess of 90%, meaning that approximately 50,000 businesses are meeting the requirement;
  • – more than 700 million invoices have been transmitted representing EUR 630 billion in value.
  • – 84% correlation between reported transactions and the corresponding VAT returns.

Therefore, the Ministry plans on accelerating the time it currently takes to obtain VAT refunds. At the same time, we can likely expect Spain to roll out SII to remaining businesses not currently required to participate in the program, possibly as early as 2019. Spain is also considering using SII data to produce proposed VAT returns for taxpayers to review and submit, rather than waiting for taxpayers to produce their own.

 

Businesses in Spain – and around the globe – should expect more changes to come.

Governments are updating and changing regulations faster than ever. Spain, which only recently launched transactional reporting and is already announcing significant changes, is proving to be no exception.

Take Action

Companies in Spain – and throughout Europe – need an intelligent compliance and reporting strategy. One that gives them capabilities by addressing not only mandate go-live dates but also frequent modifications in the years to come. Download our tip sheet on must-have features for Spain SII compliance to see how an Intelligent Compliance approach helps businesses minimize risks and make compliance more efficient.

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Author

Brian Elswick

Brian Elswick is the Marketing Programs Manager for Sales & Use Tax, Business-to-Government Reporting, and VAT.
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