COVID-19: Last opportunity until April 30 to elect the monthly refund scheme with effect from April 2020
Spain Tax Commentary
As we recalled in our alert on April 15 (see here), companies that have already elected the REDEME monthly refund scheme have a few days left for electing this scheme with effect in their April returns (a few more days for those filing quarterly returns and have revenues not higher than €600,000, with effect in the first quarter of 2020).
The monthly refund scheme implies the need to meet a number of procedural requirements that do not exist if the scheme is not elected:
One is that to be included in the monthly refund scheme the self-assessment returns for the tax have to be filed monthly.
Additionally, VAT record books must be kept on AEAT’s website. In other words, the obligations associated with the immediate information sharing system (SII) must be fulfilled.
The main advantage of electing the scheme, however, is that VAT refunds are requested at the end of every monthly assessment period.
It must be recalled that to elect the monthly refund scheme, the taxable person must: (i) have no outstanding tax obligations, and (ii) not be in any of the circumstances that could give rise to preventative removal from the register or withdrawal of their taxpayer identification number, under articles 144.4 and 146.1 b), c) and d) of Royal Decree 1065/2007, of July 27, 2007.
Although the ordinary deadline for requesting registration for the monthly refund scheme ends in November every year, the scheme may be elected before the end of the filing deadline for every self-assessment return. More specifically:
Traders or professionals filing monthly returns may request registration for the scheme until April 30, with effect in the April VAT return (to be filed in May).
The deadline for anyone filing quarterly returns ends, generally, on April 20, with effect in the months in the second quarter. However, Royal Decree-Law 14/2020, of April 14, 2020, has extended the deadlines for filing returns relating to the first quarter of 2020 until May 20 (see our alert) for companies with revenues in 2019 not higher than €600,000, and therefore, exceptionally, the request for registration by these traders can be made until May 20.
If the scheme is elected in the specified time periods (on form 036 and, for VAT groups, on form 039), the immediate information sharing (SII) obligations will relate to the whole of 2020, even though registration for the monthly refund scheme comes into effect in the April return.
Therefore, from a practical standpoint, if it is decided to elect the monthly refund scheme for April it appears recommendable to request inclusion as soon as possible, to enable other procedural obligations to be fulfilled adequately, and, in particular, to enable immediate information sharing (SII) records to be kept for this period.