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V0654-20 2 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Compliance with legal requirements and deadlines mandatory to reduce taxable base for unpaid invoices

The applicant asks how to recover VAT paid when client invoices remain unpaid. The DGT rules that the taxable base may only be modified if the strict requirements of Article 80.4 of the VAT Act are met, including the passage of time and the initiation of judicial or notarial claims.

The question raised

Recovery of the Value Added Tax amount paid by the taxpayer in the event of non-payment by the recipient of the taxed operations.

The DGT's ruling

To reduce the taxable base due to bad debts, one year must have elapsed since the accrual (or six months if the volume of operations is less than 6,010,121.04 euros). It is mandatory that the circumstance is recorded in the accounting books, that the recipient is a business person or that the base exceeds 300 euros, and that collection has been sought through judicial claim or notary requirement. The adjustment must be made within three months after the end of the aforementioned six-month or one-year period.

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