The opportunity for Spanish companies to join the new cash reporting VAT scheme has been extend to 31 March 2014.
The Spanish VAT cash accounting scheme was announced last year to help small businesses better manage their cash flows. It enables companies to opt to only pay over VAT due on actual cash revenues received (instead of invoices issued), offset with input VAT on expenditure also actually paid out. The scheme is only available for companies with an annual turnover below €2 million. At the end of each financial year, any non-payments of VAT on completed supplies will automatically become due for payment.
The scheme therefore simplifies VAT administration for small traders and protects them against the need to pay VAT on sales before receiving cash from the customer.
