NEW IVA CASH BASIS SYSTEM

Starting on the 1^st of January 2014, the Law 14/2013 introduced as a new option, the Cash based system for the IVA tax.

This is a way for the companies and professionals attached to this tax declarations working in a new way that allows not declaring the Incomes IVA until the moment is received the payment from the client. In the same way, the Expenses IVA amounts of those outstanding invoices from suppliers cannot be claimed until the invoices are paid. 

The limit to be delaying the declaration of those IVA amounts will be counting from the moment when the deal is made, as maximum until the 31^st of December of the following year.

The main points for this new system are:

• That system can only be applied by the persons/companies with an operation volume on the previous year, not higher than  2.000.000€.
  
  
• Optional:

Can be chose  if the taxpayer has been applied for it.  And it will be extended unless there is a renounce. In case of renounce, that will be valid for 3 years.

• Operations included:

All of them made in the IVA effect territory.

Excluding:

1. The ones from the modules system, equivalence recharge, agricultura and fishing, gold investments, and other special IVA systems.
2. The selling of goods excluded on the articles 21,22,23,24 and 25 of the Law (exports and sells inside the European Union).
3. The purchases  of goods inside the European Union.
4. Operations when there is a taxpayer reverse.
5. Imports and similar actions.
6. Those mentioned on the articles 9.1 and 12.

The tax will accrue at the moment of the partial or full payment of the goods or services.  Or the 31^st of December of the following year if the payment has not been made. The moment of the partial or full payment has to be justified.

                        Recipients of the trades affected by this system

In the case of taxable persons not subject to the system but being recipients of the operations provided for therein, the right to the deduction of IVA amounts supported on those operations is born:

• At the time of the partial or total payment of the price by the amounts effectively satisfied. Or the 31st of December of the following year to that in which the operation is made if payment has not been

A strict control of the invoices would be applied so, as always, a fiscal inspection can be a problem if the invoicing or taxation is not being carried in an efficient way.