1. 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)

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 RTR (Change RTR) of the operations made by Solvay entities in Spain. 

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

(are all these companies active?)

2. Definitions

See Finance Glossary:

• ESPL (add to Finance Glossary)
• SOP (add to Finance Glossary)

3. Tasks description

3.1. Periodicity and Deadlines

The proposed deadlines for the transfer of information between SBS Back office (change Back office), and Solvay FTO (change FTO) are as follows:

3.2. I prepare the M303 – Monthly VAT Return

This procedure is done on a monthly basis by SBS-BO(change BO) , any inconsistency checked must be corrected before sending it to FTO (change FTO) .

3.2.1. I run the SAP ledgers

Run transaction S_ALR_87012357 and enter the appropriate variants:

• IVAESPAÑA - for companies 0245, 5696, 3454 and 1427;
• 0005+6070_ES – for companies 0005; 6070; 6233; 6234 and 1419.

E.g. for Solvay Química, reporting period 04/2012, fill in:

• Company Code: 0245
• Posting Date: From 01.04.2012 to 30.04.2012

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, 340 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

After lunching the transaction as explained in step 3.1.1, (confirm section) preliminary quality checks on the use of the tax codes should be performed before month end closing in order to allow the correction of potential errors in due course and limit manual adjustments a posteriori.
Any inconsistency detected in any of the checks hereafter should be addressed inside BO (change BO) for confirmation and posterior corrections. 

Due to the possibility of having invoices issued/received with the previous VAT rates, in all sections of the procedure it will be mentioned the two SAP VAT related codes, to distinguish between the new and the old tax codes. 

Checks to perform:

1) Verify all tax codes with VAT rates different from the applicable rates in Spain, i.e. 0%, 4%, 10% and 21%

1. 1. If a tax code has another rate, e.g. 8% and 18% which is the Spanish VAT rates applied before September 2012, verify that:
      1. The invoice is dated before September 1, 2012.
      2. The invoice is not older than 4 years.
      3. If the invoice is older than 4 years, the input tax should not be recovered via the VAT return.

 b. If a tax code has another rate, e.g. 7% and 16% which is the older Spanish VAT rate applied before July 2010, verify that:

1. 1. 1. The invoice is not older than 4 years.
      2. If the invoice is older than 4 years, the input tax should not be recovered via the VAT return.
      3. The invoice is dated before July 1, 2010.
         
         

2) Verify the Intra community Acquisitions of Goods (Tax codes RV – 18 % or 8R – 21%)

Check that all the movements done using this tax code have only foreign VAT Numbers. This means that invoices posted with these codes and Spanish VAT numbers are not correct.

3) 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 costumers/vendors with non Spanish N.I.F. communitarian.

4) 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"

5) 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".

6) Verify movements with VAT code 9R

New tax code 9R _ Plant abroad – ADQUISICIONES INTRACOM. DE BIENES must have the same treatment as code 8R, we need to insure that Code 9R should only be used in company SCI.

7) Verify the tax codes 8G and 8O relate to operations made with specific suppliers:

8) Verify the invoices from the following suppliers/customers:

9) Verify the invoices with retention:

SBS-BO (change BO) need to guarantee if all Invoices with retention, are correctly posted because the percentage of the retention is not the same as the tax code. So amount posted in account 2452030000 must be different from account 2411030034, according to the percentages in use: 

• • 27 - IVA sop. 21% con ret. IRPF 15 %
  • 28 - IVA repercutido 21% + 19,5% IRC Rent
  • 8( - IVA 21% con ret. IRPF 19%
  • 9( - IVA repercutido 21% + 20% IRC Rent 

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 : ESTORCF
  • Company 5696: XZECOMAHIVA569
  • Company 3454: ES3454-IVA

3) Period : fiscal year and previous fiscal year:

• • Fiscal year: from 2011 to 2012
  • 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:

The Layout selected is already excluding the doc type "COBK":

7) Filter the column "INV_Posting" 

Select only the period of the month of the VAT report. 
For example, if March 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. As a template you can use the attached file. (write the name of the file and link it)

10) Check the consistency of the information:

Generally the tax codes to be reported in the VAT return Fund are 99 or 8F and 95 or 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. (see egg. April 5696 below).

For each document that you identify with a negative amount, go to SAP and open it:

Confirm the VAT that is being calculated:

Now compare with the amounts reported in Z1k_Detail:

We can see that in the first line the invoice amount 4.095,70 € is already considering the credit of 81, 91 € from the second line. This means that we should exclude the second line from our total to report in the VAT return fund. 

11) Complete lines 31 to 34 of the VAT template (remark: these amounts will also automatically be deducted from lines 21 to 25).

3.2.4. I complete the VAT return template

 Open the Excel VAT return template

1) Enter the figures in the cells of the VAT return template highlighted in blue based on the tax codes of the SAP report S_ALR_87012357 extraction (step 2.1.1.);

2) Enter the figures extracted for the of capital expenses in the cells lines 31 to 34 of the VAT return template (step 2.1.3.);

3) 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";

4) If tax codes not included in the Excel file include VAT amounts, please print out the list of invoices and refer to BO;

5) Reconcile VAT balances from the draft VAT return with the ones from the G/L account. In case of inconsistencies, BO must find the origin of the difference, and in last case contact FTO (change FTO);

Verify that the results of the below checks do not show inconsistencies. In case of inconsistencies, BO (change BO)must find the origin of the difference, and in last case contact FTO (change FTO);

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. 
In case the draft VAT return show results in a VAT payable position, please prepare the excel document, NRC which represents the payment request form, by filling in the missing data for the respective Solvay entities. 
Finalize the VAT review package, i.e. the draft VAT return, the agreed reconciliation, the payment request form, the list of adjustments and the list of issues (if any).

• If something needs to be changed, the package will be returned to RTR back office(change RTR back office)  for reworking.
• If no changes are necessary, the review package will be forwarded to the Solvay contact person in Spain for the final review and approval.
• If the Solvay local contact person does not agree with the preparation, the RTR back office (change RTR back office) will be notified for any changes that need to be done.
• If the Solvay local contact person approves the draft VAT return, he/she will proceed with the filing of the return and perform any VAT payment due.

RTR-BO (change RTR-BO) must follow up with the Solvay local contact person to confirm the receipt of the package and get back a copy of the submitted VAT return for archiving.

3.3. I prepare the M340 - Transactions listing

In this declaration we must detail line by line all the accounting registrations, with detailed information of all invoices registered with VAT.

3.3.1. I run the SAP ledgers

To have all the necessary information you must perform the following: 

1) Enter in the table using transaction TC_RENT_M340_ES and fill it with all the documents with VAT 9E/9O, 9(/8( and 27/28 for all companies for the month we are closing. To check the documents to add, enter transaction S_ALR_87012357 and make sure that "Output/Input tax: line items" are selected and search for invoices with the tax codes mentioned (the information about the documents can also be retrieved when performing quality checks). 
Once in the transaction the information you must fill in the table is:

• • Document Number;
  • Year

  • Cadastral Reference according with:

    Name	Refª Cadastral
    0245 - Solvay Quimica	5734001VP1053D0001YU
    3454 - Solvay Iberica	9738305DF0993N0001AP
    5696 – Inovyn España	0235401DF1903N0001WO

The final result should be similar to:

In case you want to add/remove lines, select the edit mode  and on  you can add new information and on  delete the selected lines. 

2) Run transaction S_EB5_05000379 and enter the appropriate variant "ES-M340 (2011)" for Spanish Companies (0245, 5696, 3454). 
Since January 2012 SCI (companies 0005; 6070; 6233; 6234 and 1419) must submit also this form, the transaction to be used is Z_ES_RFIDESM340 and the variant to select is "ES-M340 SCI"
E.g. for Solvay Quimica, reporting period 04/2012, fill in:

• • Company code: 0245
  • Posting Date: From 01.04.2012 to 30.04.2012
  • Reporting Period or Quarter: 04/2012
  • File name: ES_340_0245_MM (where MM is the month 04)

• • The outcome of this step should be as follows:

Extract this information to excel by clicking on  . This information will be very useful to identify all the possible errors that will be displayed when working in the WEB site. 
After saving the data click on the arrow  and make sure that the field "Decleration I" has the corresponding number, at this moment the table for the txt file data is uploaded. 

3) Go to transaction Z1F_DOWNLOAD_340 and select the variant "ES-M340" in this transaction we will download a TXT file with the information from the previous transaction that will be treated on the web site.
You need to guarantee:

• • Source file - same name from transaction Z1F_ES_MODEL340
  • Target File: Replace the company code xxxx (eg. 0245) 
  • Target Disk Drive: Always "C" 

 

The outcome will be a TXT file to be upload into the web form.

3.3.2. I perform the actions on the website Agencia Tributaria (AEAT)

3.3.2.1. I require information before working on the website

1) TXT files available to upload; 

2) Subsidies Information (the information will be sent by MO):
The information about subsidies is not totally automatically uploaded from SAP we must pick the information from accounts 7400000000 - subsidies received and from account 6441000000 - subsidies given. 
To extract the data run report FBL3N with variant "ES_SUBSIDIES", extract the information to excel and perform a consistency check per each document:

• • Identify the Vendor name and VAT Reg. number code;
  • Identify if the amounts to be added in the M340 (invoices with VAT are not considered);
  • Define where should be inserted: If 7400000000 - subsidies received should be added as "Facturas Expedidas"; If it's 6441000000 - subsidies given should be added as "Facturas Recibidas "

3) DUA – Tax code 9Q or 8J

Check if for all SAP documents posted with tax codes 9Q or 8J you have attached copy of the official document. If not attached to the SAP document RTR-BO (change RTR-BO) should contact Front Office (change Front Office) to obtain the input tax amounts + document numbers relating to imports of goods.

3.3.2.2. I upload information from the website

Open the web and type the following address: 
https://www.agenciatributaria.gob.es/AEAT.sede/Inicio/Componentes/Tramites_destacados/Presentar_y_consultar_declaraciones/Presentar_y_consultar_declaraciones.shtml (not working: update, give a name and link it; write it in the Attachments Block)

Select "MODELO340" 

Another screen will appear and you must select "Programa de ayuda para la cumplimentación y presentación 2013 (Recuerde que se exige certificado electrónico para la presentación) (not working: update, give a name and link it; write it in the Attachments Block)

You will enter on the below screen, there you will start to work on the information to be delivered to the fiscal authorities. Errors in the upload may occur if within the txt file we have non common characters, we may change to be able to upload the file. 

To perform the upload of the files downloaded with transaction Z1F_ES_MODEL340 you must select "Archivo" and then "Leer Declaración", then you will have to select the txt file you want to upload:

You'll get the following screen with the information within the txt file: 

3.3.2.3. I make consistency checks on the web site

After uploaded the following check's and corrections need to be performed:

• Errors could occur due to transactions under tax code 8L and 9L (error message will appear) since the transactions (without VAT amount) should in principle not be reported in the VAT return.
  
  
• Search for Visa and American Express movements and delete them from the list (except records linked to vendor AMERICAN EXPRESS BARCELO VIAJES).
  
  
• In company 5696 if appear an error linked to account P04004168 - MA. ANGELS OLIVE QUEROL we should remove it from the list. This is a movement linked to an employee expense.
  
  
• Delete wrong records (no identified third parties such as "compras contado" (codes 4235 and 2971) or "ventas contado" - code 1100000731).
  
  
• Search via the function "Buscar", enter the subject "Contado" for "Apellidos y nombre" and search trough the uploaded ledgers.

Once you get the information just click on the button B "borrar" to delete these records:

• If the taxcode 9Q or 8J appears in the VAT ledgers the following information has to be checked/added in the web site as Invoices received - "Facturas Recibidas":
  1. 1. Name of the vendor (that appears in the DUA as "Exportador" not the Declarante/Representante);
     2. Country Code;
     3. "Clave Ident. Fiscal País Residencia" select "Documento Oficial de identificación expedido por el pais o território de residência";
     4. In "Identificación de la factura" we must add the following information: DUA IMPORT +Document number of the document (attached to this movement in SAP).

• Premises Renting

h7.When the company receives invoices of renting:

To identify the invoices received in the period open transaction FBL3N with variant "ES_RENTAL", after filter the text column by "Alquileres" to search for the invoices:

For these documents we must add as "clave de operación" in M340 an "R".

h7.When the company issues the invoices of renting:

With the development of transaction TC_RENT_M340_ES, there is an automatic way to add to the M340 the information about all invoices issued with tax code 9E or 9O, to these documents we must check that "clave de operación" in M340 has "R", in field "Situación del inmueble" option "1" and the below information for the "refª cadastral":

Like the example:

SUBSIDIES

As mentioned the information about subsidies is not totally automatic and must be prepared previously. 
In the website we need to confirm the information and change/select in field "Clave de Operación" the option "S" for all the documents identified. In the field "Identificación de la factura" we have to insert the corresponding document number showed in SAP. 

PROPERTY SALE - This is not a usual transaction. If any, Solvay Local will give the information.

All these modifications can be saved and a new TXT file will be created. 
Once all transactions are correctly reported, go to tab sheet "Resumen" on the AEAT website and verify whether the VAT amount in line "Importe total de la cuota" matches with the total VAT amount reported for sales and purchases.
In this respect, please complete the reconciliation in the above ES VAT return template called M340 vs M303 Reconciliation_TEMPLATE and clarify the differences. 

3.3.2.4. I finalize the M340 

Finalize the transaction listing review package, i.e. the draft transaction listing, the agreed reconciliation, the list of adjustments and the list of issues (if any). The review package should be done within back office:

• If no changes are necessary, the review package will be forwarded to the Solvay contact person in Spain for the final review and approval.
• If the Solvay local contact person does not agree with the preparation, the RTR Back Office (change RTR Back Office) will be notified for any changes that need to be done.
• If the Solvay local contact person approves the draft transaction listing, he/she will proceed with the filing of the return.

Follow up with the Solvay local contact person to confirm receipt of the package and get back a copy of the submitted transaction listing for archiving. 

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

This procedure is done on a monthly basis by RTR-BO (change RTR-BO) .

3.4.1. 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) = 3454;
• Fecha de contabilizacion (release date) = e.g. 01.02.2011 until 28.02.2011.

• The outcome of this step should be as follows:

3.4.2. 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 Reconciliation_TEMPLATE.

• • Within the file "Cuadre 349 - OPERACIONES INTRACOMUNITARIAS" for company 5696 we have a column with Operac Triang. 9x we can retrieve that information after lunching the report S_ALR_87012403 in collumn "Tri.deal - EU triangular deal" we must filter to see if we have any document to be considered in this column – normally appears with an "X".

• • The tax code 8D or 81 even if it is intracomunitary is not reported in the ESPL report (Modelo 349).

• • Complete the totals in file M303 VAT RETURN_TEMPLATE_2015. In case of inconsistencies, BO (Change BO) must justify and report to Local team.

3) Examples of modifications that may be required:

1. 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 (change PtP) and amend the posting. Note that this amendment will also have an impact on the VAT return (model 303) and potentially on the transaction listing (model 340);
      
      
   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).

3.4.3. I prepare the filing

Go to transaction Z1F_DOWNLOAD_340 and select the variant "ES-M349" in this transaction we will download a TXT file with the information from the previous transaction that will be treated o the web site.

You need to guarantee that:

• Source file - same name from transaction S_ALR_87012403
• Target File: Replace the company code xxxx (eg. SCI) 
• Target Disk Drive: Always "C" 

Enter the transaction txt file into the program "Informativas 349" software installed in your computer, to create the file to submit on the website of the Spanish tax authorities. 
See below how to complete the process to prepare the ESPL return:

1) To import data from the txt file created in Z1F_DOWNLOAD_340 you need to select:

Importar > Importar registros con fornato BOE 

2) Once uploaded, confirm the boxes of the company data as follows:

• • Datos del Declarante
  • NIF: VAT number of the company
  • Apellidos y nombre (…): Name of the company
  • Apellidos y nombre de la persona (…): Contact person (always Elsa Perez Moreno)
  • Teléfono de contacto: Phone number of the contact person (always 93 773 44 71)

3) With the upload all figures must be according to the txt file, you may confirm it selecting "Operaciones" and compare to your file.

The program is able to perform an analysis of the data uploaded and gives you a list of errors that have to be corrected. Click on  to check them. 
It can occur that we have some rectifications or corrections related the previous months reported. 
For example, we may find negative balances in the file for the M349 upload, for instance:

The correct procedure is to check in FB03 the document(s) with the negative amounts and check for what month these are related (in this case the credit note was posted in February but it was related with an Invoice posted in November of the previous year), we can also check FBL1N the Vendor account or the image of the Credit note to search for more information. 
After identifying all data we can insert in the ESPL return within the Rectificaciones tab:

Always having in consideration the month to which the rectification refers to maintaining also the same "Clave de Operacion":

4) Once all the data is entered and all rectifications/corrections performed, the ESPL file must be obtained and saved in your computer. On the left side of the screen, click on the line created by your return. Then click on the "world" icon :

5) A window will pop up. Click on Siguiente:

6) Select the period that you are working and click on "Siguiente":

´

7) Click on Presentación telemática and then on Siguiente:

8) In the following screen create a folder within the C:aeat folder to save your return there.

Select also the option "Deseo una copia en papel de la declaración" then click on Siguiente.

9) Click on Finalizar to generate the file

10) Your ESPL file is now created and saved.

11) There is also the possibility to save the return in pdf format (not applicable in 2013): 
For that, click on the print logo at the top right corner of the page. 
A window like this will pop-up, click on Si.

A window like this will pop-up, click on Finalizar 

Choose a folder to save the PDF. 

3.4.4. I finalize the M349

As a final step finalize the ESPL review package, i.e. the draft ESPL return, the agreed reconciliation, the list of adjustments and the list of issues (if any). The review package should be done within back office:

• If no changes are necessary, the review package will be forwarded to the Solvay contact person in Spain for the final review and approval.
• If the Solvay local contact person does not agree with the preparation, the RTR back office (change RTR back office) will be notified for any changes that need to be done.
• If the Solvay local contact person approves the draft ESPL return, he/she will proceed with the filing of the return.

Follow up with the Solvay local contact person to confirm receipt of the package and get back a copy of the submitted ESPL return for archiving. 
The ESPL return filing will in principle be done in Spain by the Solvay local contact person. For information purposes, please find below attached the instructions on how to file an ESPL return in Spain.

3.5. I finalize the monthly process (M303 / M340 / M349)

Once all the steps are completed we must always send the information to Elsa Perez, one e-mail for each company code, with all documents like:

• Print screen of the SAP summary report
• Completed Excel VAT template including the draft VAT return and the reconciliation sheet
• Draft transaction listing (form 340)
• Draft ESPL (form 349)
• Dashboard of Intra communitarian Operations
• Payment Order (when applicable)

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

3.6. I prepare the M390 - Annual VAT return

3.6.1. I run the SAP ledgers

No specific process exists in SAP for the annual VAT return. This return summarizes all figures reported in the monthly VAT returns. The steps mentioned hereafter will be done locally it's just for information.

3.6.2. I perform quality and consistency checks

The form 390 is filed once a year and summarizes all figures reported in the monthly VAT returns (303). Please reconcile the amounts reported in the periodical VAT returns with the year-end amounts to be reported in the annual VAT return. There should be no differences between the VAT positions of the periodical VAT returns and the final result of the annual VAT return. 
No corrections can be made in the form 390. Any corrections required need to be made in the related periodical VAT returns.

3.6.3. I prepare for filing

To prepare the 390 form with the Spanish tax authorities, specific software needs to be installed on the computer of the person preparing the 390. In the below attached manual you will find instructions on how to install the necessary software. The instructions refer to the software for the 2011 form. Note that every year new software is released. However, the steps to install it remain in principle the same.

• The 390 return can be prepared through the software. Note that the boxes in the 390 form that is released every year may differ from the ones in the below manual.
  
  

• The actual filing of the annual VAT return will be done by RTR-BO (change RTR-BO) and submitted by the local responsible

End of document.