Cash VAT: clarifications on collections and payments and allocation of VAT quotas
Posted: Sun Dec 22, 2024 5:46 am
As we mentioned last week , cash VAT will be a reality for all companies starting next year and many companies will be able to opt for this new special tax settlement regime.
Companies that adopt this system will have to be very clear about when the collection and payment is effective, in order to be able to correctly settle the VAT, given that the actual collection or payment varies depending on the payment method used.
Collections and payments by transfer
In the case of collections and payments by transfer, the imputation of the same is simple, since the payment is valid at the same time that the money leaves our account and for telegram korean list the purposes of the collection, we would have to take into account the effective date of payment. For a couple of years now, the date of payment and the value date coincide, so this system does not have any major significance for VAT purposes.
However, it is an asymmetric system and if I pay on the last day of the quarter and my supplier receives payment on the first day of the following quarter, we may have discrepancies in the imputation in form 347.
Checks and promissory notes for VAT imputation purposes
In the case of paying by check or promissory note, the effective date for payment will be the day the amount of the effect is withdrawn from our account and to impute the collection, the value date of the deposit will be taken as the effective date , a date that normally differs from the day of deposit of the check or promissory note, given that until the value date, the money is not firmly considered as collected.
Regarding promissory notes or bills of exchange at a discount, the effective collection date will be taken as the due date , not the day the financial institution pays us the advance amount of said effect.
Direct debit, the big unknown in collection imputations
Today, the most complicated factor for allocating the effective date of collection is the collection of direct debits issued under rule 19. Today, the return period for receipts can be up to 53 days, so effectively, collection would not be made until the ordinary return period has elapsed.
The Tax Agency has not yet commented on this point, but the reasonable criterion to follow is the imputation of VAT at the time of payment of the remittance after the settlement of the refunds within the first 7 days. However, this problem will be eliminated by the implementation of SEPA in B2B systems, since there will be no refund period longer than 3 days.
Companies that adopt this system will have to be very clear about when the collection and payment is effective, in order to be able to correctly settle the VAT, given that the actual collection or payment varies depending on the payment method used.
Collections and payments by transfer
In the case of collections and payments by transfer, the imputation of the same is simple, since the payment is valid at the same time that the money leaves our account and for telegram korean list the purposes of the collection, we would have to take into account the effective date of payment. For a couple of years now, the date of payment and the value date coincide, so this system does not have any major significance for VAT purposes.
However, it is an asymmetric system and if I pay on the last day of the quarter and my supplier receives payment on the first day of the following quarter, we may have discrepancies in the imputation in form 347.
Checks and promissory notes for VAT imputation purposes
In the case of paying by check or promissory note, the effective date for payment will be the day the amount of the effect is withdrawn from our account and to impute the collection, the value date of the deposit will be taken as the effective date , a date that normally differs from the day of deposit of the check or promissory note, given that until the value date, the money is not firmly considered as collected.
Regarding promissory notes or bills of exchange at a discount, the effective collection date will be taken as the due date , not the day the financial institution pays us the advance amount of said effect.
Direct debit, the big unknown in collection imputations
Today, the most complicated factor for allocating the effective date of collection is the collection of direct debits issued under rule 19. Today, the return period for receipts can be up to 53 days, so effectively, collection would not be made until the ordinary return period has elapsed.
The Tax Agency has not yet commented on this point, but the reasonable criterion to follow is the imputation of VAT at the time of payment of the remittance after the settlement of the refunds within the first 7 days. However, this problem will be eliminated by the implementation of SEPA in B2B systems, since there will be no refund period longer than 3 days.