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V0121-14 21 January 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Recognition of professional fees under the cash basis accounting method

The taxpayer asks which portion of their fees should be recognised when the initial payment includes the full amount of VAT. The DGT rules that, if the cash basis is chosen, only the portion of income proportionally corresponding to the amount received should be recognised, without including VAT as income.

The question raised

What amount must the consultant attribute to the professional fees corresponding to the first half paid by the legal entity, given that the total VAT is included in the first payment.

The DGT's ruling

If the cash basis criterion is applied, the taxpayer must attribute to the tax period the income that proportionally corresponds to the amount collected. It cannot be understood that the amounts collected correspond entirely to the VAT installments, nor that the deferred amounts are the only pending income. Output VAT is not considered income from the activity.

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