1. How to issue a VAT-exempt invoice
Al issue invoices, you should keep in mind that not all have VAT.
Actually, its creation does not differ too much from the usual billing, but it is necessary to be clear about its particularities.
So, let's see how to issue a VAT-exempt invoice.
Take note!
2. Which invoices are free of VAT?
The Value Added Tax (VAT) is linked to the consumption of goods and services.
However, according to Law 37/1992 of December 28, there are some sectors of exempt professional activities, such as those detailed below:
– Sanitary services.
– Teaching.
- Tutorials.
– Artistic copyrighted services.
– Insurance operations, capitalization, loans and credits.
- Real estate activities.
– Non-profit sports and cultural activities.
– Postal services.
– Deliveries of goods and services linked to political parties.
As well Deliveries of goods outside the Spanish borders (exports) and, usually, to the Canary Islands, Ceuta and Melilla are exempt from VAT.
Additionally, you must distinguish between:
– Activity invoice exempt from VAT. Although the tax should apply, the Law has excluded those actions. It is, therefore, a cancellation of the Administration on the payment.
– Invoice not subject to VAT. The Value Added Tax does not apply due to the type of operation, since it does not meet the conditions defined in this tax by law. An example? The sale of a second-hand apartment between individuals.
3. How to issue invoices exempt from VAT?
These are the steps you have to follow:
1. Includes the data required on any invoice. Invoice number, issue and expiration date, name and surname or company name, NIF or CIF, tax address, description of the operation, tax base and total invoice.
2. Indicate if it is VAT exempt or operation not subject to this tax. You must enter it in the tax section of the invoice.
3. If it is the case of a VAT-exempt operation, include a written note in which you explain the reasons why said operation is free of VAT. This reference is essential for the Treasury, so you should not forget it. It alludes, in this justification, to Directive 2006/112/CE, of November 28.
4. Occasionally, if there is a inversion del sujeto pasivo, must also be reflected in the document prepared.
On the other hand, we remind you that the responsibility of passing or not the tax corresponds to the supplier. Therefore, if you receive a purchase invoice of this type, you must post it with the data it reflects.
4. How can you take advantage of the factoring to pay VAT?
One of the particularities of VAT payment is that it is paid quarterly, regardless of whether the invoices in question have been collected or not.
This can generate treasury problems, because if it is not paid, you have to advance to the Administration an uncollected money. In this context, the invoice advance is a financing alternative highly recommended.
The Invoice Advance, also known as Factoring, is a financial service that allows you to cover the gaps in working capital, transforming your credit sales into cash sales.
5. With or without recourse?
In the market, we can find different types of factoring.
If you decide to opt for the invoice advance, whether or not they are exempt from VAT, you must take into account the differences between:
– Factoring without recourse. In case of non-payment, the financial entity will assume the inconveniences generated.
– Factoring with recourse. In the event of non-payment, both the assignor and the debtor will be jointly and severally liable for the debt.
When contracting one service or another, the cost differs. When the financial institution assumes the risk of non-payment, the costs are higher. However, with this modality you protect your portfolio from non-payment by your clients.
6. The reliability and efficiency of Workcapital
En workcapital, we have a long history in the sector, supported by the vocation of service and involvement with each client.
We personalize our services to your needs and offer you an agile, transparent and reliable service.
