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V1655-20 28 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · devengo

VAT and Income Tax transactions must generally be declared in the period they accrue

A self-employed worker enquires about the periods in which VAT, business income, and withholdings must be declared, given potential discrepancies in weekly collections. The DGT rules that VAT and income are recognised based on their accrual, while withholdings follow the income tax imputation period.

The question raised

In which settlement period must the Value Added Tax corresponding to the transactions carried out be declared; as well as the income from economic activities and the corresponding withholdings for Personal Income Tax purposes.

The DGT's ruling

In VAT, transactions must be recorded in the tax period in which they accrue, subject to special accrual rules. For Personal Income Tax (IRPF), income from economic activities is imputed to the period of accrual in accordance with accounting regulations, unless the cash basis (collections and payments) has been opted for. Withholdings are imputed to the fiscal year in which the income must be imputed, regardless of when they are applied.

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