21 de December de 2012 By webmastergafic

Analysis of new cases of reverse charge VAT in the implementation of the Law 7/2012

Analysis of new cases of reverse charge VAT in the implementation of the Law 7/2012

New cases of reverse charge

General rule: employers shall be liable or professionals
supplying the product or providing the service subject to VAT.

Particular 1: shall be liable for entrepreneurs and professionals who conduct transactions subject to VAT (recipients) in the cases listed below:

1. When they are made by persons or entities not established in the territory of application of the tax. (TAI)
However, there will be the reverse charge in the following cases:

a ‘) In the case of services where the recipient is established either in the TAI, except in the case of services covered by Article 69.Uno.1 º LIVA.
b ‘) In the case of the supply of goods referred to in Article 68. Three and Five LIVA.
c ‘) In the case of supply of goods which are exempt from tax by applying the provisions of Articles 21, number 1. º and 2. º, or 25 LIVA.

2. In the case of supplies of gold material or semi-finished gold bill and over 325 thousandths.

3. In the case of:
a) Supply of new industrial waste, parings and scrap of cast iron, and other waste materials consisting recovery ferrous and non ferrous metals, their alloys, slag, ash and residues containing metals industry or their alloys.
b) operations selection, cutting, fragmenting and pressing to be made on the products mentioned in the previous script.
c) the supply of waste or scrap of paper, cardboard or glass.
d) the supply of semi-finished products resulting from the processing, manufacturing or casting of non-ferrous metals referred to in the first indent, except for nickel compounds. In particular, be considered intermediate products ingots, blocks, plates, bars, grain, grit and wire.
e) In any case, be considered covered by the preceding paragraphs deliveries of materials defined in the Annex to this Act

4. In the case of the supply of land following:
• Deliveries made as a result of a bankruptcy proceeding.
• The exempt supplies referred to in paragraphs 20. º and 22. 20.Uno of article in which the taxpayer had waived the exemption.
• Deliveries conducted under the guarantee provided on property, meaning also that forfeits when the property is transferred in exchange for the termination of all or part of the guaranteed debt or obligation referred to extinguish the debt by the purchaser.
5. In the case of execution of work, with or without provision of materials and supplies of staff for implementation, following directly formalized contracts between the developer and the contractor aimed at land development or construction or
rehabilitation of buildings.
The provisions of the preceding paragraph shall also apply when the recipient of the operations are themselves the main contractor or other subcontractors on the terms indicated.

Particular 2: will be taxable legal persons not to act as entrepreneurs or professionals but are addressed in the transactions subject to VAT below made by entrepreneurs or professionals not established in the territory of application of tax:

a) subsequent deliveries Community acquisitions referred to in Article 26.Tres LIVA he has disclosed to business or professional who performs the identification number, for VAT purposes, are assigned by the Spanish.

b) The services referred to in Articles 69 and 70 LIVA.

Concept jobbing

Is obtaining by an employer of a good new material from the client entrusted (ECJ Judgment of 14 May 1985 Case 139/84)
It is essential that it is a very distinct from the materials used for their manufacture.
Leasing services: what is the benefit of the promised work.
Execution of work: the promise is the work or work output.

Delivery of goods Delivery of Services
Constructor execution estate work contributes materials> 40% taxable Builder Provides materials <40% taxable
Constructor execution movable work and provides all materials provided by the client Builder provides materials, but not all or builder does not provide materials

Concept building.

The constructions permanently attached to land or other property, made both on the surface and underground, that are capable of autonomous and independent use.

In particular, the following constructions are provided below together with a property in a fixed manner, so that it can not be separated without breaking of the material or damage to the object:
– The buildings, considered as such all permanent construction, separate and independent, designed for use as housing or to serve the development of an economic activity.
– Industrial facilities not livable, such as dams, tanks or landings.
– The platforms for exploration and exploitation of hydrocarbons.
– Ports, airports and markets.
– The sports and recreational facilities which are not ancillary to other buildings.
– The roads, canals, railroads, roads, highways and other roads land or river and bridges and viaducts and tunnels on them.
– Fixed installations cableway.

No buildings will be considered:
– The works of land development and in particular the supply and drainage, electricity supply, gas distribution networks, telephone systems, access, streets and sidewalks.
– The farm accessory buildings that relate to the nature and purpose of the property but the owner of the farm, their relatives or people who are working with him in his house them.
– The use and decorative objects, such as machines, tools and equipment and other property by destination referred to in Article 334, numbers 4 and 5 of the Civil Code.
– The mines, quarries or tips, oil or gas or other place of extraction of natural products.

Concept of rehabilitation of buildings

It must meet the following two conditions:

That the principal purpose of the reconstruction of the buildings:
• more than 50% of the total cost of the rehabilitation project matches consolidation works or treatment of structural elements, walls or roofs or similar or related works to
the rehabilitation.

Total cost of works exceed 25% of the purchase price of the building (if acquired during previous two years beginning works) or, alternatively, the market value of the building or part of it in the beginning.
• be deducted from the purchase price or the market value of the share of the building to the ground.

Are considered similar to rehabilitation works:

– The structural adequacy provide safe building construction, so as to ensure its stability and strength.
– The reinforcement or adequacy of the foundation as well as affecting or treatment consisting of pillars or slabs.
– The expansion of the floor area, above and below ground.
– The reconstruction of facades and courtyards.
– The installation of lifting elements, including architectural barriers intended to save for use by the disabled.

Related works are considered to rehabilitation:
– The masonry, plumbing and carpentry.
– The measures for improving and adapting enclosures, electrical, water and air conditioning and fire protection.
– The energy rehabilitation.
– And when:
• The total cost is less than consolidation works and similar works.
• They are always inseparably linked.
• Do not simply consist of finishing or decoration of the building or maintenance or simply paint the facade.

They considered the energy rehabilitation measures for improving the energy performance of buildings:
– Reducing energy demand,
– Increasing the system performance and thermal installations or
– Incorporating equipment using renewable energy sources.

Waiver of exemption

Subject to VAT; transferor or transferee, depending on the operation.

Subjective requirements:
– Acquirer VAT taxpayer;
– Purchaser entitled to full deduction of input VAT.

– Are waivable exemptions on delivering rustic and unbuildable, downpayment and award Compensation Boards and second and subsequent delivery of buildings.

Requirements (Pending regulatory amendment):
– Renouncement of previous or simultaneous delivery;
– Declaration signed by buyer finding that an entrepreneur with deductibility of the VAT paid;
– Communication to acquiring reliable foregone.

Practical application: execution of work


Between developer and contractor in contract aimed at the development of land, construction or renovation of buildings.
The reverse charge applies to the whole chain of participants in the operation of work execution.

Thus, the subcontractor 2 VAT invoice issued to the subcontractor one and the same shall include the following legend: “Operation reverse charge according to art. 84., Paragraph one, number 2 º f) of Law 37/92 of VAT ”

The one entrepreneur or professional subcontractor, receives the subcontractor’s invoice without VAT 2 and auto-impact and deducts the VAT. In turn, the subcontractor one issue the VAT invoice to the main contractor and the same shall include the following legend: “Operation reverse charge according to art. 84., Paragraph one, number 2 º f) of Law 37/92 of VAT ”

The main contractor, businessman or professional, get the subcontractor’s invoice without VAT 1 and self-impact and follows VAT. In turn, issue a VAT invoice to the promoter in which shall include the following legend: “Operation reverse charge according to art. 84., Paragraph one, number 2 º f) of Law 37/92 of VAT ”

The developer receives the invoice without VAT prime contractor and self-impact and deducts the VAT. The promoter will invoice the customer (end user) as had been operating so far, since in this case does not affect the modification, ie VAT invoice.

In relation to construction certificates already issued prior to 31.10.2012:

1. If they are written (there has been no collection or delivery)
– Regarding the invoices issued by execution of work that are not delivered or recepcionadas to October 30, 2012 and has not produced the anticipated collection that date, it shall be canceled and no new emission impact of VAT

2. If they are already written (by delivery or payment in advance)
– Conversely, in respect of invoices issued for execution of work that are delivered or recepcionadas to October 30, 2012 or has occurred, your payment in advance of that date, any action will not proceed.
– Subcontractors bills received by October 30, relating to transactions where:
+ Had been paid or delivered the work, there is no modification.
+ If no payment is made or undelivered the work should produce changes in the bill.

In general cases, in which entities are entitled to deduct VAT paid at 100%, the car is neutral impact and deduction.

Only produce the reverse charge exclusively when recipients of execution of works are entrepreneurs or professionals for VAT.

From January 1, 2011 was eliminated the obligation to issue “self-invoicing”, so you will not need to comply with this formal requirement for entitlement to the deduction of input tax
This deletion does not affect the obligation to include in the record books with operations VAT reverse charge.

Briefly, the execution of work bills should be drawn as follows:

Invoice without VAT:
If there is work execution of building or leasing of personnel for implementation.

VAT invoice:
• If the bill is only for material deliveries.
• If the invoice refers to external services or accessories that are not considered jobbing (transport of goods, architectural studies and projects, maintenance and repair services, tax advice, …)
• Services that occur at a time after the completion of the work.

Practical application: various assumptions

Industrial electrical installation performed in a new work and who performs the task of it is the promoter.
– Industrial: Outputs the invoice without VAT
– Promoter: self made impact

Contractor performing the electrical installation of a hospital that is being rehabilitated.
– Contractor: Outputs the invoice without VAT
– Hospital: self made impact

Industrial installing air conditioning in a nursing home who is running for 5 years.
– Industrial: VAT invoice issued

Company doing the installation of an elevator in an old building that is being rehabilitated by a builder.
– Company: NO VAT invoice issued
– Constructor: self made impact

Industrial performing the installation of an elevator in an old building that handles the Owners.
– Industrial: VAT invoice issued

Industrial performing the installation of a new elevator in a nursing home that was already working.
– Industrial: VAT invoice issued

Businessman making the placement of a dumbwaiter in a restaurant which opened a year ago.
– Entrepreneur: Outputs the VAT invoice.

A security company that provides a service monitoring of a building that is under construction.
– Company: Outputs the VAT invoice.

Contractor who executes a work on a new housing and provides a monitoring service that is included in the execution of work contract.
– Contractor: Outputs the invoice without VAT.
– Constructor: Performs autorrepercusión

Contractor performing the cladding and flooring for new construction work to the promoter.
– Contractor: Outputs the invoice without VAT.
– Promoter: Performs autorrepercusión

Industrial coating that makes the pavement at the home of an owner
– Industrial: VAT invoice issued

Excavation company that performs the adaptation of a ditch and it makes the transport of materials to the rune and work area.
– Company: NO VAT invoice issued
– Contractor: self made impact.

Transport company providing the transport of material and rune to work and billed to the constructor.
– Company: Outputs the VAT invoice is service

Industrial is discharged in section 501.3: masonry and construction work on buildings (taxed in objective assessment).
– Industrial: Outputs the invoice without VAT
– Contractor: self made impact

Industrial riding a disabled platform and built a home in the last 5 years.
Industrial: Outputs the VAT invoice (reduced rate of 10%)

Pray apologize for the length of the document, but no way to synthesize more and minimally understood.

Premia de Mar, December 21, 2012

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