. Objective and Scope

1.1. Objective of this Operation

This document explains VAT process within Spain and how to perform quality checks in order to get the expected result, and how to fill in the Spanish authorities' website. 

The VAT reporting obligations in scope for Spain are the following:

• VAT return (Form 303)
• ESPL (Form 349)
• Annual VAT return (Form 390), when applicable (only for companies not submitting SII)

1.2. Scope

This VAT procedure compliance process manual is to be used as a step-by-step guideline to facilitate the VAT reporting (by VAT SU team) of the operations made by Solvay entities in Spain. 

It describes the compliance process for the preparation of the VAT return, ESPL and annual return for the following companies:

2. Definitions

See Finance Glossary:

• ESPL (add to Finance Glossary)

3. Tasks description

3.1. Periodicity and Deadlines

The submission deadlines of the legal obligations are the following:

3.2. I prepare the M303 – Monthly VAT Return

This procedure is done on a monthly basis by VAT SU Team and any inconsistency must be checked.

3.2.1. I run the SAP ledgers

Run transaction S_ALR_87012357 and enter the appropriate variants:

• IVAESPAÑA - for companies 0245;
• 0005_ES – for company 0005
• ZFR3 - ZFR3_VAT_ES
• The remaining companies don’t have a specific variant.

E.g. for Solvay Química, reporting period 11/2021, fill in:

• Company Code: 0245
• Posting Date: From 01.11.2021 to 30.11.2021

This report will show you the listing of all movements on vendors and customers for the company and period selected and the resume of all transactions by VAT code will be compiled in the different VAT models (303 and 349). 

The outcome of this step should be as follows

Extract this information to excel by clicking on the button  . 

3.2.2. I perform the preliminary quality checks

Spanish VAT Rates

• Standard Rate 21%;
• Reduced Rate 10%;
• Super-reduced Rate 4%.

Checks to perform:

1) Verify the Intra community Acquisitions of Goods (Tax codes 8R – 21%)

Check/validate that all the postings done using this tax code have only EU VAT id Numbers to guarantee that no acquisitions made to Spanish suppliers are considered.

2) Verify the Operations with tax exemption (tax codes 8L/9L "OPERACIONES NO SUJETAS – EXENTAS IVA en COMPRAS/VENTAS)

We must verify if the movements done using these taxes have customers/vendors with Spanish VAT numbers which perform exempt operations.

3) Tax code 8L (incoming invoices without VAT) relate to operations made ONLY WITH SPANISH SUPLLIERS, in this tax code we should not have amount in "IMPORTE A PAGAR" or "DEDUCIBLE"

4) Tax code 9L (outgoing invoices without VAT) – relate to operations made ONLY WITH SPANISH CUSTOMERS, in this tax code we should not have amount in Tax to be paid "IMPORTE A PAGAR" or deductible tax "DEDUCIBLE".

5) Verify movements with VAT code 9R

Tax code 9R _ Plant abroad – ADQUISICIONES INTRACOM. DE BIENES must have the same treatment as code 8R (movement of goods between the same legal entity and between EU countries).

6) Additional checks 

a) Posting P-Cards documents:

Run: Report S_ALR_87012357

Variant: ES_VAT CHECK-1

Check documents with document type S6 and Tax code 8F, only to be check the VAT Spanish numbers. The remaining documents with foreign VAT number, we only can recover the VAT through the 8ª Directive.

b) Posting of DUA's:

We need to consult the “Agencia Tibutaria” website and check all the import documents that need to be posted linked to the month of closure.

E.g.:

https://www1.agenciatributaria.gob.es/wlpl/inwinvoc/es.aeat.dit.adu.adip.ivaDif.qry.QIVADifInt

c) Self Billing:

Add the reference in document  posted for vendor “Cuñado”, otherwise the document will not have the correct correspondence in SII.

Run transaction: FB03

Select document type RP and the month of closure

3.2.3. I launch the SAP report on fixed assets

On a monthly basis, is needed to inform the invoices of capital expenses posted on the month of the VAT report.
This information is obtained performing the following actions:

1) Launch the transaction Z1K_DETAIL

2) Select Variant :

• • Company 0245 : 0245 ASSETS

3) Period : fiscal year and previous fiscal year:

• • Fiscal year: from 2020 to 2021
  • Period: From 01 to 12

4) Click on the button 

5) Once the information is on the screen, change the view to an Excel- format view.

To do it, click on the button  .

6) In that screen select the layout "/ES VAT" only the following columns should be extracted from the report:

7) Filter the column "INV_Posting" 

Select only the period of the month of the VAT report. 
For example, if November selected:

8) Download the information to an Excel File by clicking on  . 

9) Once created the Excel File, perform the subtotals by tax code and insert a new column to calculate the VAT amount. 

10) Check the consistency of the information:

Generally the tax codes to be reported in the VAT return Fund are 8F and 86;

Tax code 8L should be excluded;

In case of tax code different from the ones above they should be analyzed individually. For instance check the original invoice and confirm if the tax used is really a Spanish tax code;

In case negative amounts are displayed, they should be checked line per line. 

3.2.4. I complete the VAT return template

 Open the Excel VAT return template

1) Enter the figures in the sheets of the VAT return template highlighted in blue based on the tax codes of the SAP report S_ALR_87012357 extraction;

2) Verify that the remaining tax codes (i.e. those that are not reported in the Excel file) do not include VAT amounts in columns "Importe a pagar" or "deductible";

3) Reconcile VAT balances from the draft VAT return with the ones from the G/L account.

Verify that the results of the below checks do not show inconsistencies

These checks are done automatically in the attached "ES VAT return template" and are highlighted or are included in the "Reconciliation" tab of the above mentioned file. 
The draft VAT return will be automatically completed using the Excel VAT return template. 

3.2.5. I finalize the M303

Once the above steps are completed, the VAT return can be considered as finalized. 

Once the VAT Return analysis is completed we need to access to the “Agencia Tributaria – Sede Electrónica” site: https://sede.agenciatributaria.gob.es/Sede/inicio.html using the Digital Certificate of the Company:

We must complete the boxes with the info below:

Then if the company is in a Credit position we need to fulfil the amount of reimbursement to be requested in the form. In case of Debit position, the payment is automatically done when submitting the VAT Return, in Agencia Tributaria.

• Data to be fulfilled in case of reimbursement (Example Cy 0245):

• Data to be fulfilled in case of payment (Example Cy 0245):

The VAT returns for companies 7794, 5835, ZFR3 and 6301 are submitted by an external provider.

3.3. I prepare the M349 - European Sales and Purchase Listing

This procedure is done on a monthly basis by VAT SU team.

3.3.1. I run the SAP ledgers

Run transaction S_ALR_87012403, after select the appropriate variant > ES-M349 and the appropriate release date to determine the reporting period, filling in:

• Sociedad (name of the company) = 0245;
• Fecha de contabilizacion (release date) = e.g. 01.11.2021 until 30.11.2021.

3.3.2. I make consistency checks

1) Make sure that the totals of the SAP transactions match with the totals of intra-community acquisitions and supplies in the VAT return for the respective period.

2) ) To perform checks between M349 and M303 you can use template file named: M349 VAT Return Template.

• The tax code 8D or 81 even if it is intracommunitary is not reported in the ESL report (Modelo 349).
• Complete the totals in file M303 VAT Return Template.

3) Examples of modifications that may be required:

1. Missing VAT numbers: in this case, check the underlying invoices and complete the missing information;
2. VAT number is from a Spanish supplier: as this listing relates to European transactions, this is not correct. In this case, check the underlying invoices. If it appears that a purchase from a Spanish supplier was wrongfully included as an EU purchase of goods/services, please inform SBS-PtP and amend the posting. Note that this amendment will also have an impact on the VAT return (model 303).
3. Credit notes: in this case, check the underlying invoices and complete the missing information (i.e. invoice number and period of the return in which the invoice was reported – explained in detail in the next step).

3.3.3. I prepare the filing

We need to run the transaction S_ALR_87012401 in order to create the upload file which is an xml format. Then we upload this file to Agencia Tributaria Site:.

3.4. I finalize the monthly process (M303 / M349)

Once all the steps are completed we must always send the information regarding company 0245 to Ernest Farran, with all documents like the proof of submission of Modelo 303 and Modelo 349 - example below of the email sent each month.

We must also add comments with all the problems encountered during the VAT process.

End of document.