As they must be taxed as VAT those incomes left to be received, even after judgment and execution of the same, and considered as uncoventable by the foreseeable insolvency of the debtor, for a company registered in the special cash regime.

The Special Cash Regime was one of the measures implemented with Law 14/2013, of September 27, on support for entrepreneurs and their internationalization, in which article 23 regulates this special regime by which the self-employed and SMEs may benefit from this regime in order not to have to advance to the Tax Agency the VAT on invoices not collected, being the main requirement to apply it not having had a turnover greater than 2,000,000 euros in the previous year.

Article 163 third paragraph establishes that the Tax will accrue at the time of the total or partial collection of the price for the amounts actually received or if this has not occurred, the accrual will occur on December 31 of the year immediately following that in which the operation was carried out. That is, in any case it will be extended until the moment of collection, or as a maximum period until the end of the immediately subsequent year.

How does the special cash regime affect accrued but predictably unpaid payments having mediated judgment and executive process?

Those companies framed within the Special Cash Regime, which having accrued collections, have not managed to make them effective, and having initiated a judicial claim, in which after a final judgment, and initiated enforcement proceedings, consider that due to the foreseeable insolvency of the debtor these amounts will be uncoventable, they will have the possibility of not having to face the payment of VAT quotas for said amounts, by rectifying the tax bases and tax quotas passed on.

This possibility is regulated within article 80.Cuatro of Law 37/1992, of December 28, on Value Added Tax (LIVA) in which it is established that the taxable base of the tax may be reduced proportionally when the credits corresponding to the quotas passed on by the taxed operations are totally or partially uncofable.

For the purposes of this Law, it must be understood that a credit is totally or partially uncoctionable when:

  • That one year has elapsed since the accrual of the output tax without the collection of all or part of the credit derived from it having been obtained.

In the case of transactions with installments or deferred price, one year must have elapsed since the expiration of the unpaid terms in order to proceed to proportionally reduce the taxable base.

When the holder of the credit right whose taxable base is intended to be reduced is an entrepreneur or professional whose volume of operations, calculated in accordance with the provisions of article 121 of this Law, had not exceeded during the immediately preceding calendar year of 6,010,121.04 euros, the term referred to in this condition 1 may be, six months or one year.

In the case of operations to which the special regime of the cash criterion is applicable, this condition will be understood to be fulfilled on the date of accrual of the tax that occurs by application of the deadline of December 31 referred to in article 163 terdecies of this Law.

  • That this circumstance has been reflected in the Record Books required for this Tax.
  • That the recipient of the operation acts in the capacity of entrepreneur or professional, or, in another case, that the taxable base of the same, Excluded Value Added Tax, is greater than 300 euros.
  • That the taxable person has requested its collection by judicial claim to the debtor or by means of a notarial request to the same, even in the case of claims secured by public entities.

Rectification of tax bases and tax quotas passed on.

In section B of the same article 80, it is established as a requirement that the modification must be made within a maximum period of 3 months once the period established in section 1 seen above has ended, and must in turn make the corresponding communication to the Tax Agency within the established period; period of 3 months that in the case of applying the Special Cash Regime, should begin to be counted from December 31 of the immediately following year, in accordance with article 163 terdecies of the LIVA.

On the other hand, the LIVA itself establishes in its article 89, the way in which the rectification of the VAT tax quotas must be carried out, “One. Taxable persons must rectify the tax amounts passed on when the amount of the same has been incorrectly determined or the circumstances occur that, according to the provisions of article 80 of this Law, give rise to the modification of the taxable base.

The rectification must be made at the moment in which the causes of the incorrect determination of the quotas are noticed or the other circumstances referred to in the previous paragraph occur, provided that four years have not elapsed from the moment in which the tax corresponding to the operation was accrued or, where appropriate, the circumstances referred to in Article 80 occurred.”

This process of rectification of tax contributions is developed in turn by article 24 of the VAT Regulation approved by Royal Decree 1624/1992, of December 29, which establishes that the taxpayer will be obliged to issue and send to the recipient of the operations a new invoice in which it is rectified or, where appropriate, the output quota is cancelled, in turn complying with this invoice, with the requirements laid down in Article 15 of that Regulation.

In conclusion, those companies or self-employed who apply the Special Regime of the cash criterion, may proceed to the modification of the taxable base and the rectification of the tax quotas passed on, from the moment in which it can be understood that the accrual has occurred, from December 31 of the immediately following year (article 163 terdecies). It is from that date, when the period of three months will be counted to make the modification that may be made, following the conditions and requirements established in the VAT Regulation, on that same day December 31.

In this way, it will not be necessary to proceed to enter the unpaid quotas to later request their refund, since with the modification of the taxable base it can be done from the moment it is understood that they have accrued.


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