. 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:

(*) Local contact in Spain, even for the cases where the submissions are made by external providers

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

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

8) Additional checks - Company 0245:

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):

3.3. 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":

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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.