The Spanish VAT authorities have started an information campaign as regards those companies which are not SII compliant, either because of their failure to provide any SII information at all or, for the case that such information was provided, because of the same is not consistent with the data that is declared at the corresponding monthly VAT return (form 303).

The communication from the tax authorities reminds uncompliant companies, not only of the possibility that their behaviour may give rise to the imposition of penalties but, also, as to the risk that the deduction of the input VAT declared at their VAT returns may be disclaimed.

This later warning implicitly refers to article 99. Three of the Spanish VAT Law which, for the case of a tax review taking place following a previous notice from the Administration, conditions the deduction of the input VAT quotas included at the VAT return to the fact that the same have been properly registered. If not, the deduction would be postponed to the period when such a registration takes place (please notice that, according to article 166. Two of the Spanish VAT Law, taxable subjects are obliged to reflect all the business transactions in their VAT registers within the dead-line to file the corresponding VAT returns).

With the experience gained after, almost, three months of helping companies with their SII obligations, we think worthwhile stressing the importance of a very simple routine which many may be tempted to dismiss as unnecessary.

We refer to the convenience to formally check and keep evidence that the data declared by the company at its monthly VAT returns is consistent with the data resulting from the SII registers for the same period.

This routine is especially important at this initial stage when, assumedly, the SII has not been fully automated by companies and, as a result, it cannot be ascertained that all sets of data are fully consistent, namely: the ERP’s accounting data, the SII reporting data and the data that is produced for VAT declaration purposes.

When carrying-out the reconciliation between SII registers and VAT returns, a plus of attention must be paid to those set of data which may be especially problematic for SII reporting purposes, as may happen with those transactions that are to be specifically declared at the following boxes of form 303:

A new updated version of F.A.Q’s has been published at the website of the Spanish Tax Agency to be considered since the 3rd of August. There are new questions added (2.43 and 2.47) as well as an update of some of those already existing.

Given its implications, especial notice must be taken of the new updated version of F.A.Q’s 6.1. that refers to: Transactions which must be included in the “Register of certain Intra-Community operations”.

It must be remember that this Register contains data referred to the physical movement between two member states of the company inventory when there is no a transfer of ownership (the so called “transfers”) or of fixed assets which are to be subject to certain works. No reference to amounts of taxable base or VAT quota is contemplated among those data to be provide at the SII report for these transactions.

At the new version, by way of a new paragraph included at this F.A.Q., the Tax Authorities point-out to the obligation to also include “transfers” at the corresponding Register of Issued or Received Invoices, namely: “For the case that the transaction is documented by an invoice it will also have to be informed at the Register of Issued Invoices or Received as it may correspond”.

The Spanish invoicing ordinance does not make any special mention as to how transfers are to be documented and, we advisors, have been considering that, since not involving two parties nor the transfer of ownership, “transfers” are documented with a pro-forma and not a proper invoice.

Now, however, the company will be obliged to decide if it is actually issuing actual invoices as a document to support its “transfers”, which may be considered to be the case if no special series or numeration is used, nor a special mention that indicated the “pro-forma” nature of the document.

Furthermore, it is perhaps preferable to assume that “transfers” are anyway to be declared at the Registers of Invoices Issued and Received. By doing so, besides avoiding any future problems, the company will be in a position to more easily reconcile its SII Registers with the corresponding monthly VAT return. Until now, this task was complicated by the fact that no reference to the VAT incurred in “transfers” needed to be reported for SII purposes and, so, did not appear at the VAT Registers meanwhile forming part of the periodical monthly VAT returns.

Once the first days from the commencement of the Immediate Information Supply (SII) have elapsed, we want to make an initial assessment based on our experience as providers of SII compliance services to those of our clients affected by the new obligation.

From the outset, our approach as advisers has come from a double consideration, namely:

a)             The difficulties for many companies affected by the SII of being able to implement in time a definitive solution to manage in an automated way the information obligations of the SII, the two possible options being:

The following entry has been published at the heading of SII news in the Spanish Tax Agency website:

“26-06-2017 SII: Term calculator 

In order to provide calculations for the terms for sending invoice registrations through SII, a "Term Calculator" is added in the SII banner in the "General Information" section. This tool indicates the deadline for sending the registrations, as well as the period and year registered in the Register book of issued invoices and in t:he Register book of received invoices for each of the keys of invoices F1 to F6.”

It must be remembered that, during 2017, the dead-line for the submission of the SII reports will be of 8 working days to be calculated: 

Register of Issued invoices: From the date of issuance of the invoice.