SII, VAT management system based on Immediate Supply of Information

The Tax Agency introduces a new VAT management system based on Immediate Supply of Information (SII).

* Taxpayers subject to the SII (and those choosing to adopt it voluntarily) must send details of their billing records within four days via online filing on the Tax Agency website. However, during the first six-monthly period in which the system is in place, taxpayers may avail of an extraordinary eight-day extension in the immediate supply of information period (both terms exclude Saturdays, Sundays and national holidays).

* They can file and pay their periodical VAT self-assessments ten days later than usual.
* They will no longer be required to file forms 347 (third-party transactions), 340 (record books) and 390 (annual VAT summary).
* Taxpayers can contrast the information in their Record Books with the information supplied by their clients and suppliers, provided these are included in the system.

The current VAT management system has been in place, with necessary adaptations, for over 30 years. However, the current technological situation has enabled the implementation of a new Immediate Supply of Information system (SII) for VAT at this time, improving tax control and further assisting the taxpayer in meeting their obligations.

With the recently introduced modifications in VAT Regulations this new Value Added Tax management system is based on keeping a Tax Record on the AEAT online system, by providing all billing records virtually immediately.

The “Immediate Supply of Information” (SII) represents a substantial improvement in communications between the Tax Agency and the taxpayer, since it will enable them to have an instantaneous, two-way, automated relationship. Furthermore, it is a new and innovative tool, both to assist the taxpayer and to improve the efficiency of tax checks.

The SII basically consists of electronically transmitting billing records from VAT Books. To do this, the taxpayer must send the Tax Agency billing details electronically (using web services based on exchanging XML messages or, if applicable, by filling out the online form) and using this information the different Record Books will be configured, practically in real time. But taxpayers are not required to send the actual bills.

In the case of simplified bills, issued and received, these may be grouped, provided they meet certain requirements, and the billing records for the corresponding summary entry sent.

The collective that will be subject to compulsory use of the SII is made of taxpayers who are subject to self-assessment of VAT on a monthly basis:

* Large Businesses (turnover of over 6 million euros)
* VAT Groups
* Registered with REDEME (Monthly VAT Return Registry)

This collective currently has developed software systems that can be adapted to comply with billing record sending within a four-day period (excluding Saturdays, Sundays and national holidays).

During the second half of 2017, taxpayers will avail of an extraordinary eight-day term for sending information (excluding Saturdays, Sundays and national holidays).

In addition, any other taxpayer wishing to voluntarily apply SII may do so. This option shall mean that the taxpayers' self-assessment obligation shall become monthly and they must stay in the system for at least one calendar year in order to exercise the option. The option to adopt SII must be undertaken during the month of November, before the start of the calendar year in which it should come into effect. The option to adopt it for the fiscal year 2017 should be undertaken during the month of June of this year.

It is a new system that will affect approximately 63,000 taxpayers, representing approximately 80 percent of the country's total business turnover.

Advantages of the system

* Quality information shall be made available in a sufficiently short time frame so as to improve the VAT management system.
* "Fiscal Information" shall be obtained, since the taxpayer shall avail of a "filed" and a "compared" Record Book on the Tax Agency online system, with all the information from third parties within the collective or the Tax Agency database.

Taxpayers will be able to compare this information before the end of the monthly VAT return term.

The taxpayer will be able to correct any error committed in filed returns without needing to be required to do so by the Tax Agency.

* Decrease in information requirements by the Tax Agency, since many of the current requirements are aimed at requesting Records, invoices or data contained therein in order to check certain transactions.
* It modernises and standardises the method of keeping traditional VAT Record Books.
* Reduction of formal obligations, removing the obligation to file forms 347, 340 and 390.
* Reduction in terms for filing VAT returns, since the Tax Agency has the information on transactions in almost real time and in greater detail.
* Taxpayers included in the new system will have the declaration and payment of periodical VAT self-assessments periods extended by 10 days.

This Immediate Supply of Information (SII) system shall enter into force on 1 July 2017.

Given the technical infrastructure necessary to manage the volume of information that will go through the system, during the first half of 2017 a series of pilot trials have been scheduled, in which a sample of businesses will take part with the support of the main software companies operating in the country who provide back-up to the majority of the collective included in the system.