The Spain Ministry of Finance released the first report detailing business compliance with the new SII mandate. According to the report, the compliance rate is in excess of 90%, meaning that approximately 50,000 businesses are meeting the requirement of providing transactional details to the government on a near-real-time basis. In the last three months, more than 700,000,000 invoices have been transmitted representing EUR 630,000,000,000 in value. Interestingly, the report indicates that the Ministry has found an 84% correlation between reported transactions and the corresponding VAT filings. Companies currently have the ability to review what is referred to as the contraste, which is a report that comparing their submittals to SII against what their customers and vendors are filing.
In sum, the initial report views SII as a success as evaluated against both adoption rates and the resulting level of VAT filing compliance. In recognition of this success, the Ministry plans on accelerating the time it currently takes to obtain VAT refunds. At the same time, we likely can 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 talking about the possibility of using SII data to produce proposed VAT returns for taxpayers to review and submit, rather than waiting for taxpayers to produce their own.
