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V0328-20 12 February 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · devengo

VAT on services must be declared when the service is rendered, not when paid

A technical architect asks when VAT on a issued invoice must be declared and whether expenses can be deducted without having charged VAT in the same period. The DGT responds that VAT arises upon rendering the service and must be declared in that period, and that expenses are deductible if they relate to the activity.

The question raised

To determine when the Value Added Tax corresponding to that invoice must be declared, as well as whether the amounts incurred for certain expenses related to the activity (fuel, utilities...) can be deducted in a return without reporting accrued amounts in the same period.

The DGT's ruling

VAT on the provision of services accrues when the operations are executed and must be declared in the corresponding period even if payment is made later. Regarding deduction, the amounts incurred for goods or services used for the activity are deductible even if no accrued amounts have been reported in the same period, provided that the requirements of the Law are met. In the case of fuel, its deductibility is decoupled from the acquisition of the vehicle and depends on its use for professional activity.

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