Spain will introduce an optional VAT cash accounting scheme for businesses with turnover less than EUR 2 million effective from 1 January 2014. On 27 September 2013, the new Spanish cash accounting scheme was approved by Law 14/2013.

The main features of the VAT cash accounting scheme are as follows:

  • The threshold applies to taxable persons with a turnover not exceeding of 2 million Euros for the previous year.
  • The application to use the scheme is optional.
  • The scheme is applicable to all transactions taking place within the Spanish VAT territory.
  1. The cash accounting scheme is not applicable to certain transactions, including:Transactions under the special schemes for farmers, retailers, investment gold, services rendered by electronic means and VAT groups.
  2. Supplies eligible for the exemption for intra-Community supplies and export.
  3. Intra-Community acquisitions.
  4. Reverse-charge.
  5. Imports.
  6. Self-consumption.