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V2605-21 27 October 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · devengo

Invoices from ceased activities are taxed for VAT on accrual and for IRPF based on the imputation criterion applied

A professional who has ceased their activity asks how pending invoices should be taxed. The DGT indicates that for VAT, the tax accrues upon the provision of services or advance payment, whereas for IRPF, it depends on the temporal imputation criterion (accrual or cash basis) applied by the taxpayer.

The question raised

How one must act regarding VAT and Personal Income Tax (IRPF) when collecting said invoices.

The DGT's ruling

In VAT, the tax accrues when services are rendered or, in the case of advance payments, at the time of collection. Undeclared installments must be regularized through late supplementary self-assessments. In Personal Income Tax (IRPF), income retains its nature as income from economic activities and is imputed according to the accrual or cash basis used by the taxpayer. Withholdings are applied upon payment of invoices and are imputed to the period in which the income is imputed.

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