When we talk about the Tax and Tax Agency, surely your hair will stand on end. And it is that many times we fear that we are not doing things well and find ourselves with a notice from the Treasury in which they demand money from us accompanied by its corresponding "sanction". Therefore, today we are talking about equivalence surcharge.
But what is the equivalence surcharge? Who pays for it? How does it work? If you also want to know this "tax" related to VAT, we help you understand it completely.
What is the equivalence surcharge
Let's start by defining what an equivalence surcharge is. In this case, you have to bear in mind that it is an indirect tax. It implies a series of obligations for freelancers, companies, entities and companies, whether they are services or industries, as well as civil companies.
And what does this equivalence surcharge do? Well it is a special regime that applies to VAT. In other words, it is a special VAT that only retailers pay because the products they sell do not transform them.
For example, imagine you have a tea shop. You buy the tea from your suppliers to be able to sell it to customers, but you don't transform it, but, in some way, you act as a mediator between supplier and customer. Well, this type of activity, in addition to being obliged to VAT, would also have the equivalence surcharge.
Who is affected
Now that you know a little more about what we mean, and that we have told you a little about who "suffers" it, let's delve into it.
According to the regulations of the tax agency, the equivalence surcharge directly affects the retail trade, to individuals or civil companies, to community members, community of property, recumbent inheritances ...
In the case of retailers, not everyone has to pay this "tax", but it is only mandatory for those who invoice more than 20% of their sales by invoicing professional clients and entrepreneurs.
On the contrary, industrial activities, services and wholesale trade would be exempt from this surcharge.
What products are excluded
Although we have told you that the equivalence surcharge affects those goods that are sold directly without transforming them, that does not mean that all products are included in it. In fact, there are some products that would be exempt from paying this "tax". We are not just talking about the fact that more than 20% of billing is made to freelancers and / or companiesRather, if a series of products are marketed, they do not have to enter the equivalence surcharge regime. And what are those products? Well: vehicles, leather clothing (but not bags or purses), petroleum products, jewelry, industrial machinery, antiques, original art objects, minerals, iron, steel, spare parts and pieces ...
How the equivalence surcharge works
So that everything is clearer to you. Imagine a sale occurs. The person "obliged" to bear this equivalence surcharge is the provider, whose invoice must reflect this surcharge. However, It is done in a certain way and this is linked to the VAT itself, since depending on the VAT that is supported, the equivalence surcharge changes.
For example, if the VAT that you put is 21%, then the surcharge is 5,2%. If the VAT is 10%, the equivalence surcharge is 1,4%. Finally, if the VAT is 4%, then the surcharge will be 0,5%.
In this way, the invoice of that supplier must reflect both the taxable base and the VAT and, depending on this, the equivalent surcharge that corresponds to it.
Advantages and disadvantages of the equivalence surcharge
Regardless of what you may be thinking about the equivalence surcharge, the truth is that in addition to the disadvantages that you can see, it also has advantages.
Among them, the main and most important is the fact that the retailer, for this surcharge, has no obligation to declare VAT nor to keep the accounting books.
For its part, the worst thing about this surcharge is that the VAT on purchases cannot be deducted, which means that you have to assume a higher expense, because on the one hand you have the VAT and on the other the equivalence surcharge.
Equivalence surcharge obligations (and exemptions)
If you are one of those who are affected by the equivalence surcharge, you should know that there are a series of obligations; but it also exempts us from others. Specifically, it will be mandatory:
- Accredit providers that we are covered by this surcharge and that, therefore, they must enter it in the invoices. It is then when the VAT is paid to the supplier, along with the surcharge and they take charge of paying it to the Treasury.
- Keep and record invoices, since they represent an expense in form 130 of the IRPF.
- Issue invoices, but only when the client requests it. If not, the purchase receipt is more than enough. Unless they are intra-community sales, where then you are obliged to attach an invoice, as well as if the recipient is a legal person or the Public Administration.
- VAT refund obligation to those customers who have bought the products and have gone to another country outside the community. This VAT can be requested through form 308.
Are there exemptions?
Well yes, in addition to those obligations, there are other aspects that the equivalence surcharge itself that exempts us from them. These are:
- Do not present the VAT form 303 (quarterly) nor the form 390 (annual). This implies that we will not have to pay VAT.
- By not paying VAT, you do not have to keep a VAT book either (unless there are other activities or sales where we do apply it).
- There is also no obligation to invoice sales to businessmen, professionals or individuals, as long as it aims to exercise a right of a tax nature, delivery to another member state, exports and when the recipient is the Public Administration or a legal person that do not act as an entrepreneur or professional.
Finally, we want to leave you the regulations governing the equivalence surcharge. These are:
- Articles 148 to 163 of Law 37/1992, of December 28, 54 to 61 of Royal Decree 1624/1992, of December 29, 3.1.b) and 16.4 of Royal Decree 1619/2012, of November 30.
- Law 28/2014, of November 27 (BOE of 28) and Royal Decree 1073/2014, of December 19 (BOE of 20), both in force as of 01/01/2015.
Do you have more questions about the equivalence surcharge?