Compensation is one of the forms of termination of the tax debt prescribed by tax legislation.
Compensation may be carried out by the administration office, where a taxpayer is, both, creditor and debtor thereof. This assumption is when a taxpayer has a recognized credit for any tax concept, before the Administration and, at the same time, the debtor is the same for any other concept. In this case, Administration issues an official certificate of overdraft and compensates the debt - including the surcharge of late payment (see section 2.4) - with credit.
But the compensation can also be operated at the request of the taxpayer: who must present a document in which, in addition to their personal data, refer to the following information:
a) Debt whose compensation is sought, indicating the amount, date of expiry of the voluntary income and accounting reference. In the event that the debt has been determined by self-assessment, it must be accompanied.
b) Credit recognized against the State whose compensation is offered, indicating their amount and nature. It must be accompanied by a certificate from the accounting office manager of the Administration which, in each case corresponds to the existence of recognized credit, the outstanding payments and the suspension, at the request of the taxpayer for procedures for payment, while the resolution of the compensation procedure is not communicated.
c) Declaration expresses not having been transferred or assigned the credit to another person.