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Spanish SII: real-time ledger reporting

SAF-T is not enough

First of all, OECD published the first version of the Standard Audit File for Tax (SAF-T) in 2005. This began a ‘new era’ in tax compliance. Many European states implemented a transactional level of VAT reporting requirements. These were either based directly on the SAF-T model (e.g., Lithuania, Poland) or on their own concepts (e.g., Czech Republic, Romania). Spanish SII meets both trends.

Second, Spain introduced this first among the member states. It was not only very detailed, but also a very frequent VAT obligation – in real-time. Also, in July 2017, the Immediate Supply of Information on VAT (Suministro Inmediato de Información del IVA), commonly known as SII came into force.

Third, like other transactional VAT requirements, SII relies on XML files ensuring structured, standardised and harmonised reporting. Taxpayers deliver important amounts of standardised data. Thanks to the use of appropriate IT tools (including ‘trendy’ ones like AI, data analytics, big data) major automation of a tax audit is possible. For instance, so-called cross-check controls can be now quite easily automated. As a result, detection of potential VAT fraud is more probable and quicker.

Legal framework of Spanish SII

The SII reporting obligation has been implemented based on the Royal Decree no. 596/2016. This in turn introduced particular regulations into several legal acts, in particular into the Spanish VAT Regulation (RD 1624/1992).

Mandatory SII

The requirement is mainly addressed to the group of taxpayers who are obliged to follow the monthly filing regime, for example:

  • ‘large taxpayers’ – any taxpayer whose turnover exceeds EUR 6 010 121,04
  • taxpayers registered in the Monthly Refund Register (so-called ‘REDEME’ scheme)
  • taxpayers belonging to a VAT group (joint VAT registration)

What is important is the regulation applies also to non-resident entities.

Optional SII

The taxpayers not embraced by the above-mentioned obligation may still choose to follow this requirement.

For the taxpayers willing to follow the SII requirement on an optional basis, the relevant application may be made at any time. Also, this will apply as the first reporting period of the following year. The option must be then be exercised for at least one year. Furthermore, it will last until the taxpayer informs on resignation from the SII reporting option.

Reporting deadlines of Spanish SII

The outgoing invoices shall be reported within 4 calendar days. This does not include Saturdays, Sundays and national holidays. Counting from the date of

  • issuance – in cases other than below
  • dispatch – in case of intra-EU supply of goods
  • receipt – in case of intra-EU acquisition of goods 

In case of self-billing invoices or invoices issued by a third party, the period would be extended to 8 calendar days.

The incoming invoices shall be declared within 4 calendar days counting from the date of taking the accounting record. Also, within 4 calendar days counting from the date of receipt in case of intra-EU acquisition of goods.

In practice, companies issuing invoices on a daily basis should consider a daily reporting routine. Although, the law prescribes for some summary reporting, if certain criteria are met.

On the other hand, the taxpayer should consider certain benefits in terms of reporting obligations. This includes in particular:

  • Extended monthly VAT return deadline from the 20th to the 30th day of the month, following the reporting period
  • Removal of VAT informative obligations: modelo 347 (kind of domestic recapitulative statement), modelo 340 (special form for REDEME taxpayers) & modelo 390 (annual VAT return)

Penalties

Being non-compliant with SII may result in financial consequences. Potential penalties may apply:

  • 0,5% of total invoice value for a delay in submission of invoice data, from EUR 300 to EUR 6,000 quarterly
  • 1,0% value of mistake (e.g., omission), from EUR 150 to EUR 6,000 quarterly. 

Autonomous territories and Spanish SII

Spain possess territories, which to some extent are autonomous from a Spanish taxation perspective. For example, the Canary Islands are not part of the EU VAT union. Although, they do belong to Spain politically. Actually, there is different indirect tax on the Canary Islands – called IGIC. However, as of January 2019, SII reporting applies also to the Canary Islands (Decree 111/2018).

It’s worth mentioning that Spanish SII, as of January 2018, is in force also in the Navarre region – one of the provinces which collects national and regional taxes independently. 

Spanish SII reporting scope

SII requires to report 4 main ledgers (books). This contain very detailed data about taxpayers’ transactions:

Issued invoices

This book contains data about outgoing invoices including, for example, domestic sales, export of goods, standard intra-community supply of goods transactions, and appropriate credit notes.

Each invoice has to be described by a number of fields covering very detailed pieces of information like

  • Invoice number
  • Issue date
  • Seller’s data including VAT ID (NIF)
  • Purchaser’s data, at least VAT ID (NIF)
  • Description of the transaction
  • Taxable base and VAT rate
  • Invoice type (e.g., ‘F1’) – standard invoice, ‘F2’ – ticket.

Additionally, each document has to be mapped to the appropriate operation code (transaction key).  For example: ‘01’ – standard operation, ‘02’ – exportation.

Received invoices

This book contains data about incoming invoices including domestic purchases and standard intra-community acquisition of goods.

Incoming invoices, similar to outgoing ones, have to be also described by many fields. Some of them are typical for input VAT. For example, it is required to indicate a deductible amount of VAT coming from an incoming invoice.

Purchase transactions settled by reverse-charge mechanism and consequently resulting in output VAT calculation, shall be shown in a received invoices book. There is no need to indicate such records in issued invoices.

Certain intra-community transactions

This ledger contains data about specific intra-community operations. For example, so-called deemed intra-community acquisitions have to be indicated in this book. Such situation occurs, if a taxpayer transfers its own goods from one EU member state to another (in SII case – to Spain). Standard intra-community acquisitions are to be reported in a received invoices book.

Capital goods

This book is applicable only for taxpayers who are subject to pro-rata rules. In other words, to the ones who do not have a full right for deduction because of performing exempt transactions.

Technical outline

Spanish tax authorities – Agencia Tributaria (AEAT) underlines that SII is not about sending invoices themselves (even electronic invoices). However, it is about invoice records (in line with ledger structures described in the above point).

The invoice records (until blocks of 10 000 invoices) are being sent to AEAT using a so-called web service. Then, AEAT verifies (validates) the received records. After that, using the same special web service it sends the response to the taxpayer with the result:

  • Fully accepted – all records have been registered by AEAT
  • Fully rejected – all records have been rejected by AEAT (e.g., not in line with the technical structure of the ledgers)
  • Partially accepted­ – some records have been accepted, some not. Rejected records have to be submitted again.

What is next?

Finally, Spanish tax authorities have already announced that SII reporting will soon be extended to entities liable to pay excise duty (so-called Special Taxes – IIEE). The requirement shall come into force as of 1 January 2020. 

The producers, processors and warehouse keepers of excise products will generally be obliged to use electronic accounting software interfaced with AEAT. A special portal called SILICIE has been launched for this purpose. However, an alternative option of delivery of the requested data shall be enabled as well.

The obligation shall apply to various types of establishments characteristic for excise product supply chain purposes. These include in particular: factories, tax warehouses, and tax deposits. The scope of the requirement shall include registering the processing, movement and inventory events related to excise products, as well as to raw materials necessary to produce them.

Certain exceptions

Also, it is planned that certain exceptions could apply for manufacturers not exceeding certain production thresholds. For example: wine producers – 100k litres per year. Still, they would be obliged to comply with the obligation to keep electronic records or at least paper books in a pre-approved format.

The AEAT has already published the proposed content of the accounting register in the official document (Annex I) on the Customs and Excise portal of the AEAT. The document lists all the mandatory and optional information to be provided by the entities.

As a rule, the requirement of accounting for excise tax items shall be met through the usage of the AEAT portal. This enables the data to be registered directly. Alternatively, the obliged taxpayers may opt for using their own electronic accounting software to meet the requirement. In such case, the taxpayer shall officially apply for such an option in advance – till the end of November preceding the calendar year, in which the option shall be affected.


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Amazon, eBay etc., sellers: German section 22f(1) tax certificate

§ 22f Abs. 1 Satz 2 UStG : Do I need a German tax certificate?

What is my activity?

Most retailers use incorrect vocabulary, associate wrong ideas and with such a practice try to figure out their compliance requirements. We will focus on helping goods/material retailers.

We keep it simple for a maximum understanding :

Step 1: YOUR business model

Firstly, in terms of taxation we do call a sale/purchase/release, etc., a TRANSACTION. It is the formal name for “operations”, “business model”, “activity”,…

It is so far the MOST IMPORTANT thing to figure out.

Also, as a result, the correct classification will ensure a clear understanding of what the German administration will require from you as a foreign retailer, and your usual marketplaces.

It is very simple to determine YOUR transactions, for instance, you will just have to answer three simple questions:

  • Where do my dispatches start from? (and NOT where is my business located)
  • Where do my dispatches end? (and NOT where are my buyers pay from or are located)
  • Who are my customers?

Finally, we will simplify focusing on retailers concerned by the German 22f tax certificate. We assume that goods are stored in an EU member state and delivered to individuals in Germany.

Step 2: So, what does “distance sales” mean?

Secondly, you can refer to Directive 2006/112/EC, articles 32 to 36 for detailed information.
Remember : for sales of goods to individuals, there are two possibilities:

  • the “default rule”
  • a temporary “conditional relief”

Furthermore, the “default rule” considers as a competent authority the one where goods are dispatched to. So, this means that BEFORE the very first sale to Germany, you as the retailer MUST be identified and registered for VAT purposes.

Also, the “conditional relief”, agreed by all member states to remove administrative burdens for SMEs, lays out STRICT conditions.

  • the destination is not a business
  • member state of delivery published a yearly maximum delivery threshold
  • the distinct member state of dispatch is where the delivery happens

Now, what is your business model? What is your typical transaction?

You dispatch from your own state

For instance, if your goods are stored in France, Austria, Spain, Italy, etc., and the delivery address is on German territory, you will be eligible for “distance sales” administrative relief. The competent authority can be – if you respect all of the conditions – your own tax revenue administration. This allows you to invoice, collect and submit returns for the VAT of your own state.
This scheme is not compatible with products subject to excise duties !

You dispatch from German territory

So, when you store and deliver your goods within German territory, that is to make your transactions known as “domestic deliveries”. In this configuration you cannot have access to “distance sales” relief.
In short, this happens to Pan-European FBA, or retailers fulfilling orders from/or to Germany themselves, or by using “Fulfillment by Amazon”.

In this case no benefit of “distance sales” relief. You MUST invoice, collect and submit German VAT.

What is the point of a § 22f Abs. 1 Satz 2 UStG tax certificate?

Also, over a few months, we observed the German authorities’ practice of insufficient clarity or answers over transactions not clearly defined. If you require a § 22f Abs. 1 Satz 2 UStG tax certificate, and if you store goods in Germany and not being yet registered, this will not give you any results.

You NEED identification plus registration for VAT purposes if you (or your marketplace) store goods in Germany.

The German revenue administration might not give an answer to any unclear applications made. You need to be fully aware of this fact.

Requiring the § 22f Abs. 1 Satz 2 UStG tax certificate will very probably lead you to a complete identification plus VAT registration as a liable person.

Step 3: VAT Number? Identification? Registration? TIN? VAT purpose? What is your specific compliance need?

It all begins with an ID number!

Thirdly, the TIN or Tax Identification Number: what you read is what you will get!

This means, your business will have an identity as a foreign company or trader, nothing else. See format and structure of VAT Identification Number by country for your detailed information.

Your rights always come with duties!

VAT – Value Added Tax

Hence, if you sell to people that cannot be liable for VAT, and you must charge German VAT, the revenue administration of Germany will allow you under the application for VAT liability regime.

Consequently, the VAT liability regime will give you:

– a right to deduct

Also, you need to report, yourself, on your periodic VAT returns, the amounts of VAT you were charged by your suppliers, following the same rules as German companies.

– compulsory periodic returns

Furthermore, you must submit monthly / bi-monthly / quarterly local compulsory VAT returns.

Finally, the only liable person is the seller, as per the law. Also, specific situations affect the involvement of the marketplace. However, if your company is based in Europe, you are responsible.

Informative declarations (ESL or ECSL)

Fourthly, if you have supplied goods to VAT-registered customers in another EU country (or issued any credit notes) you will need to complete an EC Sales List (ECSL). Also, consider your own VAT-registration in Germany as another business for VAT purpose – you will need to report all movements of your own goods between your member state and Germany.
Furthermore, read the simply called “ZM” guide, which stands for “Zusammenfassende Meldung”. Companies running a business in Germany, will fill this form in on a regular basis.

Statistical duties

Important: if your marketplace moves your goods from a member state to another, you are liable to make statistical statements (INTRASTAT). As a result, this is closely interlinked with the VAT system relating to intra-EU trade to ensure the completeness and quality of the statistical data,… and cross checks!
You are required to provide information to your state’s and destinations state’s competent authorities (dispatch / arrival).

You can find the official guide here.

Thresholds are quite high in most member states. You need to keep an eye on them, as most of the VAT services integrated in marketplaces do not even mention them, and they are definitely part of the compulsory duties. Also, the seller is responsible for INTRASTAT. Finally, a fine is possible, if you make no submission as a Provider of Statistical Information (PSI).

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European member states and territories

ATAustria
EU customs rules applyEU VAT territoryEU excise territory
BEBelgium
EU customs rules applyEU VAT territoryEU excise territory
BGBulgaria
EU customs rules applyEU VAT territoryEU excise territory
HRCroatia
EU customs rules applyEU VAT territoryEU excise territory
CYCyprus
EU customs rules applyEU VAT territoryEU excise territory
CZCzech Republic
EU customs rules applyEU VAT territoryEU excise territory
DKDenmark
EU customs rules applyEU VAT territoryEU excise territory
Faroe Islandsxxx
Greenlandxxx
EEEstonia
EU customs rules applyEU VAT territoryEU excise territory
FIFinland
EU customs rules applyEU VAT territoryEU excise territory
Åland IslandsEU customs rules applyxx
FRFrance
EU customs rules applyEU VAT territoryEU excise territory
French GuianaEU customs rules applyxx
GuadeloupeEU customs rules applyxx
MonacoEU customs rules applyEU VAT territoryEU excise territory
Collectivity of Saint MartinEU customs rules applyxx
MartiniqueEU customs rules applyxx
FR-PFxxx
RéunionEU customs rules applyxx
French Southern and Antarctic Landsxxx
MayotteEU customs rules applyxx
DEGermany
EU customs rules applyEU VAT territoryEU excise territory
The territory of Büsingenxxx
The Island of Heligolandxxx
GRGreece
EU customs rules applyEU VAT territoryEU excise territory
Mount AthosEU customs rules applyxEU excise territory
HUHungary
EU customs rules applyEU VAT territoryEU excise territory
IEIreland
EU customs rules applyEU VAT territoryEU excise territory
ITItaly
EU customs rules applyEU VAT territoryEU excise territory
Campione d’Italiaxxx
The Italian waters of Lake Luganoxxx
Livignoxxx
San MarinoEU customs rules applyxEU excise territory
Holy See – Vatican Cityxxx
LVLatvia
EU customs rules applyEU VAT territoryEU excise territory
LTLithuania
EU customs rules applyEU VAT territoryEU excise territory
LULuxembourg
EU customs rules applyEU VAT territoryEU excise territory
MTMalta
EU customs rules applyEU VAT territoryEU excise territory
NLNetherlands
EU customs rules applyEU VAT territoryEU excise territory
Netherlands Antillesxxx
PLPoland
EU customs rules applyEU VAT territoryEU excise territory
PTPortugal
EU customs rules applyEU VAT territoryEU excise territory
AzoresEU customs rules applyEU VAT territoryEU excise territory
MadeiraEU customs rules applyEU VAT territoryEU excise territory
RORomania
EU customs rules applyEU VAT territoryEU excise territory
SKSlovakia
EU customs rules applyEU VAT territoryEU excise territory
SISlovenia
EU customs rules applyEU VAT territoryEU excise territory
ESSpain
EU customs rules applyEU VAT territoryEU excise territory
Ceutaxxx
The Canary IslandsEU customs rules applyxx
Melillaxxx
SESweden
EU customs rules applyEU VAT territoryEU excise territory
GBUnited Kingdom
EU customs rules applyEU VAT territoryEU excise territory
Gibraltarxxx

Packaging and packaging waste

First of all, before jumping straight into legal matters of packaging waste, I would consider it extremely helpful for you to read a very interesting document redacted by N. de Sadeleer, Prof. of EU Law, published on the website of Trade V Environnement.

Legal framework of packaging waste

Current legislation (source Europa/environnement)

Amending acts

Continue reading “Packaging and packaging waste”

VAT – Value added tax (Europe)

It applies to almost all goods and services for use or consumption. More than 160 countries around the world use value-added taxation. Supplier assess and collect at each stage of the supply chain, in contrast to sales tax. It applies to both services and goods.

VAT stands for Value added tax. It is harmonised by specific directives and regulations within European Union. 

Definition of Value Added Tax

  • first, VAT applies to all commercial activities involving the production and distribution of goods and the provision of services.
  • second, focused on consumption borne by the final consumer.
  • third, collected neutrally, taxable persons (i.e., VAT-registered businesses) deduct from collected amount, the amount  paid.
  • fourth, indirect : paid to the revenue authorities by the seller of the goods (taxable person).

Example : 

  • customer pays VAT on the goods or services bought by supplier
  • Customer is either a business or a private individual.
  • Periodically, businesses with right to deduct ,calculate the balance and submit a return to local revenue Administration :
    • return results in a payment when collected VAT is higher than paid one.
    • return results in a credit when paid VA is higher than collected one.

Continue reading “VAT – Value added tax (Europe)”

Excise duties monopoly & case-law. Distance selling compliance

Distance selling compliance, when it comes to excise duties for alcoholic beverages relies also on TJUE and CJUE decisions. Case-law and monopoly are key information to identify possible local burdens.

Case-law : Valev Visnapuu

This case 198/14 begins in 2008 with the sale of excisable goods from Estonia’s for lower prices to Finnish clients through home delivery of alcoholic beverages.

Supplier submitted no declaration of import to Finish customs and excise. This is obviously illegal for a variety of reasons such as excise duties, public health, environmental, retail licenses and deposit-return system for beverages. Continue reading “Excise duties monopoly & case-law. Distance selling compliance”

Distance contracts with private consumers – compliance

Legal framework of distance contracts

Consumer rights DIRECTIVE 2011/83/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 25 October 2011.

The Directive was completed by the European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (SI 484/2013) with effect from 13 June 2014. Continue reading “Distance contracts with private consumers – compliance”

Labelling of alcoholic beverages in the EU – Distance selling compliance

1. Legal framework of labeling

In force: Regulation (EU) 1169/2011 (EU 2011).

First, a European Commission report on mandatory labeling did list the ingredients and nutrition declaration of alcoholic beverages (EC 2017). This acknowledges the progress made by the industry sector in the provision of consumer information on a voluntary basis. It invited the industry to present ‘a self-regulatory proposal that would cover the entire sector of alcoholic beverages’. The European alcoholic beverages sector did submit a joint self-regulatory proposal (EC 2018a) together with sector-specific annexes (ECa). This is under current assessment by the Commission. If found unsatisfactory, the Commission can launch an impact assessment to review other options available. This option will include regulatory and non-regulatory options. Continue reading “Labelling of alcoholic beverages in the EU – Distance selling compliance”

Statistic declarations / INTRASTAT – compliance in cross-border deliveries

1. Legal framework of intrastat

First of all, provision of intra-EU trade statistics (or Intrastat legislation) allow member states to choose, to a large extent, how to implement the Intrastat system. For example, which trade data to collect from the parties responsible for providing the statistical information (PSIs) and how.

Two regulations are in force: Continue reading “Statistic declarations / INTRASTAT – compliance in cross-border deliveries”

Excise duties calculation – Distance selling compliance

In this pot you will find useful links and descriptions to EU and national ressources to calculate properly your excise duties.

Excise duties calculation : legislation

Source: European Commission > Taxation and Customs Union

First of all, excise duties on alcohol are regulated through two main pieces of EU legislation.

Furthermore, the Directive 92/83/EEC on excise on duties sets out:

  • First, the structures of excise duties on alcohol and alcoholic beverages
  • Second, the categories of alcohol and alcoholic beverages subject to excise duty
  • Third, the basis on which the excise duty is calculated

As a result, it also includes special provisions such as reduced rates for small breweries and small distilleries, certain products, and geographical regions.

Thus, Directive 92/84/EEC sets out minimum rates that must be applied to each category of alcoholic beverage. Also, it provides reduced rates for certain Greek, Italian and Portuguese regions.

Also, EU legislation only sets harmonised minimum rates.

Finally, this means that EU countries are free to apply excise duty rates above these minima, according to their own national needs.

Excise calculation and minimum rates

Excise product Rate expressed per Minimum rate:
Beer Hectolitre per degree Plato

OR

Hectolitre per degree alcohol

EUR 0.748

 

EUR 1.87

Wine

(still and sparkling)

Hectolitre of volume EUR 0
Intermediate Products

(e.g., port, sherry)

Hectolitre of volume EUR 45
Spirits Hectolitre of pure alcohol EUR 550

Also, traditional and locally produced products in certain member states.

Special legislation

Furthermore, special legislation does exist. Also, this does relate to some specific products in certain EU countries:

  • Hence, Council Decision No 189/2014/EU of 20 February 2014 authorises France to apply a reduced rate of certain indirect taxes on ‘traditional’ rum produced in Guadeloupe, French Guiana, Martinique, and Réunion. Also, it repeals Decision 2007/659/EC.

Finally, Council Decision No 376/2014/EU of 12 June 2014 authorises Portugal to apply a reduced rate of excise duty in the autonomous region of Madeira on locally produced and consumed rum and liqueurs. Also, this extends to the autonomous region of the Azores on locally produced and consumed liqueurs and eaux-de-vie.

 

Back to main excise compliance topics.
More information about VAT compliance