Claim VAT
An unpaid bill It is a big problem for a company because of everything it entails in terms of treasury and management. On the one hand, we are ceasing to have a liquidity that we had planned to receive and on the other hand, we have to activate a series of protocols for your claim and subsequent payment.
This situation becomes more delicate if the non-payment of an invoice extends over time, becoming a situation of doubtful customer or uncollectible customer, with the uncertainty of being able to recover the debt generated by the client at some point.
Within the management of our company at an accounting and tax level, we will have declared all the sales made and, therefore, entered the VAT charged into the coffers of the Tax Agency, so we will have entered money into the Treasury in the name of another person, whether physical or legal, that we have not received and that we will probably never receive. However, the Tax agency has created procedures that allow us to avoid declaring VAT and also be able to claim VAT on an unpaid invoice.
In this article we will develop the following points:
- How and when to consider an unpaid invoice?
- Recovery of VAT from an unpaid invoice.
How and when to consider an unpaid invoice?
Within the Fiscal obligations of companies and self-employed workers, is that of carrying out the VAT settlement of all invoices issued, regardless of whether they have been collected or not. In the event of not receiving payment for any, the Tax agency contemplates two situations in which a VAT refund can be claimed:
- First: That the unpaid invoice is issued to a client in bankruptcy.
- Second: That an invoice is considered and treated as uncollectible.
Here the question arises about how and when we can consider an invoice as uncollectible?, for which Tax authorities determines the following points that must be met in order to make the claim:
- That more than 6 months have passed since the date of issue of the invoice in the event that the client is an SME or Self-Employed or more than one year in the event that the non-payment comes from a large company.
- Claims through judicial means for collection of the invoice
- Invoices must be correctly recorded in the accounting books.
- That the recipient of the invoice is not a natural person, but rather a businessman or self-employed person.
VAT recovery from an unpaid invoice
If the invoice we are processing meets these points, we can begin the operation to request the refund, for which we will have to carry out a series of steps, which we analyze below:
- Claim for the unpaid invoice through judicial or notarial means
- Issue a corrective invoice.
- Send the documentation to the Tax Agency.
- Present the corresponding tax model.
Claim for the unpaid invoice through court
The first step that we will have to take in order to recover the VAT charged on an unpaid invoice will be to file a judicial claim for payment of the same. This process is known as Monitorio.
This process is characterized by being a fast and agile way to claim monetary debts, since a hearing or appearance before the judge will only be necessary if the debtor opposes the claim presented. If the debtor does not pay voluntarily or object within the period granted for this purpose, the procedure ends automatically by means of a resolution that will allow the plaintiff to go directly to forced execution, in which sufficient assets of the defendant may be seized until the debt is fully paid. claimed.
The period to make this claim will be 3 months from when the invoice is considered unpaid and uncollectible.
Issue a corrective invoice
With the issuance of this corrective invoice we will be adjusting the amount of the tax base.
Once we have demonstrated that the invoice is uncollectible, we will issue a corrective invoice that will allow us to cancel the previous invoice and, with the change in the amount of the tax base, we will officially inform the Treasury that we have not really collected anything for that invoice.
The deadlines for making this rectification vary depending on the size of the company:
- SMEs will have to make this change within 6 months from when the invoice is considered uncollectible (6 months or 1 year, depending on the size of the client).
- Large companies may make this modification within 3 months from when the invoice is considered uncollectible (6 months or 1 year).
Send the documentation to the Tax Agency
Within 1 month from the issuance of the invoice rectificative, it will have to be presented to the Tax Agency. In addition, you must include a copy of the documents that justify that the collection of the unpaid invoice has been requested through a judicial claim (monitory) or notarial.
This bill rectificative It will also have to be sent to the uncollectible customer.
The model used for communication is model 952 “Communication of the modification of the tax base in cases of bankruptcy and bad debt.”
Submit the corresponding tax model
Inside of quarterly or monthly VAT declaration, In the case of being covered by the YES, we will include this rectified invoice and, therefore, the adjustment in the Output VAT on uncollected VAT.
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