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VAT practical manual 2022.

Rectifying deductions

The cases of rectification of deductions are:

  1. Incorrect determination of deductions.

  2. Rectification of fees passed on by:

    1. Incorrect determination.

    2. Modification of the tax base.

If the correction involves increase in the quotas, can be made in the self-assessment for the period in which the taxpayer receives the corrective invoice or in the following declarations, provided that four years have not passed since the tax was accrued or since the circumstances determining the modification of the tax base have occurred.

If the correction is not caused by a change in the tax base, it may not be made after one year from the date the corrective invoice was issued.

If the correction involves a reduction in quotas, is mandatory and must be carried out:

  • If it is due to a well-founded error in law or modification of the tax base: in the self-assessment for the period in which the corrective invoice was received.

  • In the event of bankruptcy or if the taxed transaction becomes void as a result of the exercise of a bankruptcy reintegration action or other challenge actions exercised within the bankruptcy, if the initial buyer or acquirer is also in bankruptcy: in the self-assessment for the period in which the right to deduct the incurred contributions was exercised, without any surcharges or late payment interest being applied.

  • If it is due to another cause: You must submit a corrective self-assessment, applying the applicable surcharge and late payment interest, according to article 27 of Law 58/2003, of December 17, General Tax Law.

A « Calculator modification BI and other rectifications has been incorporated into the electronic headquarters of the AEAT ##1## and other rectifications », where you can consult the deadline to modify the input VAT deducted when the circumstances provided for in article 80 of the LIVA or an error occur . It also facilitates the period and exercise of model 303.

Scheme for rectification of transferred quotas and deductions
Repercussion feesRectification procedureDeducted fees
Type of variationType of variation
Increase

  1. In the self-assessment corresponding to the period in which the rectification is made, when it is based on any of the following causes:

    1. Return of containers and packaging.
    2. Discounts and bonuses made after the operation, provided they are duly justified.
    3. When taxed transactions become totally or partially void:
      • by final judicial or administrative resolution
      • according to law or commercial usage.
    4. When the price changes after the trade has been completed.
    5. When, after the tax has become due and the transferred amounts have not been paid, a bankruptcy declaration order is issued and provided that the requirements established by the tax regulations are met.
    6. When it comes to bad debts.
    7. Well-founded error of law.
    8. Amount of consideration not known at the time of tax accrual with provisional determination of the tax base by applying sound criteria.

  2. In the remaining cases and provided that there has been no prior request, the taxpayer must submit a self-assessment supplementing that of the period in which the settlement of the operations now being rectified was carried out, applying the surcharge and late payment interest that apply.

 Decrease
Decrease

  1. Regularize the situation in the self-assessment corresponding to the period in which the rectification must be made or in subsequent periods up to the deadline of:

    • One year for the passed-on fees.
    • Four years for the contributions borne if the rectification is due to article 80 of the VAT Law , otherwise it will be one year from the issuance of the corrective invoice.

  2. In the case of excess amounts charged, it may be decided, where appropriate, to initiate the self-assessment rectification procedure.

 Increase