Retailers under the equivalence surcharge regime must charge VAT when selling to companies

The equivalence surcharge regime, designed to simplify management for small retail traders, presents important particularities in commercial relationships with other companies and professionals. A recent binding ruling from the Dirección General de Tributos (DGT) has delimited the obligations of these agents regarding the charging of Value Added Tax (IVA) and the issuance of supporting documents.

What the DGT has ruled

The tax authority has determined that a retail trader subject to the equivalence surcharge regime is obliged to charge VAT on the total amount of the consideration in their sales. This applies even if the trader is not obliged to settle or pay said tax directly to the Administration, due to the nature of their special regime.

Regarding documentation, the DGT establishes that there is no general obligation to issue an invoice under this regime. However, this rule has critical exceptions: the trader must mandatory issue an invoice when the recipient of the operation is an entrepreneur or a professional, or when the client requests it to exercise their tax rights.

What it means for you

If you carry out a retail activity under the equivalence surcharge regime, you must take into account two fundamental operational aspects:

• In the sale price: When selling a product to a company or a professional, the price must include VAT, just as it occurs in the general regime.
• In invoicing: If your client is a private individual, you are not obliged to issue an invoice (unless requested). But if your client is a company or a professional, issuing an invoice is mandatory.

For companies acquiring goods from these retailers, it is essential to demand the corresponding invoice to be able to substantiate the expense and, where applicable, exercise the rights granted to them by the regulations.

What should be done

It is necessary to review sales processes and the configuration of payment systems to ensure that VAT is being correctly charged in operations with taxable persons. Likewise, it must be ensured that sales staff correctly identify whether the client is a private individual or a professional to proceed with the issuance of the invoice when required by law. Each commercial situation must be analyzed to comply with Law 37/1992 on IVA and Royal Decree 1619/2012.