Unfortunately, this situation occurs on more occasions than might be expected, leaving the company or self-employed entrepreneur who has purchased the goods or acquired the services with no apparent alternatives to be able to demand the supporting document for the transaction.
· How does not having the invoice or equivalent supporting document issued by my supplier affect me?
First of all, it is necessary to remember the importance of having the supporting invoice for each commercial transaction carried out with third parties, with various consequences for the taxable person who does not have them, among others:
- Impossibility of deducting the amount of VAT paid because Article 97 of the VAT Law requires that the document justifying the entitlement must be in the possession of the original invoice issued by the person delivering the goods or providing the service, which in most cases is the original invoice issued by the person providing the goods or service.
- Impossibility of deducting the expense of the purchase from Corporate Income Tax or Personal Income Tax, since, for the purposes of both taxes, documentary proof of the expense is required, this being the invoice issued by the person who carried out the operation.
- And, not forgetting, the impossibility of justifying, in the face of a check by the Treasury (Hacienda) or any other public administration, the reason for the outflow of money from your bank in favour of the supplier.
· Is the supplier obliged to issue an invoice?
Yes, you are obliged to do so. According to the Invoicing Regulation (Royal Decree 1619/2012, of 30 November, approving the Regulation regulating invoicing obligations), “entrepreneurs or professionals are obliged to issue invoices and copies thereof for the supply of goods and services carried out in the course of their activity, including those not subject to VAT and those subject to VAT but exempt from VAT”. This obligation is also incumbent on business people or professionals covered by the special Value Added Tax regimes.
Only those cases contained in Article 3 of the Invoicing Regulation itself, as exceptions to the obligation to issue an invoice, are exempt from the obligation.
In addition, the issuer of the invoice is obliged to send the original of the invoices to the recipients of the transactions documented therein, and this obligation must be fulfilled at the same time as the transaction is carried out and, in any case, before the 16th day of the month following that in which the accrual of the VAT corresponding to the transaction carried out occurs.
· And if the supplier does not issue an invoice, what alternatives do I have?
Article 24 of the aforementioned Invoicing Regulation establishes that “disputes that may arise in relation to the issuing, rectification or remission of invoices” are considered to be of a tax nature when they are motivated by facts or questions of law of a tax nature, and are therefore subject to appeal by filing the corresponding economic-administrative claim.
Therefore, if we find ourselves in a situation in which the supplier refuses to issue an invoice for services rendered, we could take the following steps:
- Make a friendly complaint (by telephone or e-mail) about the issuing of invoices. If this does not have any effect, you can make a formal complaint, for example, by sending a burofax, which will then help you to initiate an administrative claim.
- If the supplier still does not issue the invoice after receiving the burofax, the corresponding economic-administrative claim could then be filed, providing a copy of the burofax, a list of the facts, the nature of the service received or goods purchased, a copy of the signed contract if available, and proof of payment made. It should be remembered that this economic-administrative procedure is administrative in nature and has no cost for the taxpayer, and must be resolved within a maximum period of 1 year, in accordance with the General Tax Law.
- If the claim is duly justified and argued, it is very likely that the competent Economic-Administrative Court will issue a ruling upholding the claimant’s interests and imposing on the supplier the obligation to issue invoices for the transactions carried out within a certain period of time, with a copy of the invoices to be sent to the recipient of the same.
- However, we cannot rule out the possibility that, even though the Resolution issued by the Economic-Administrative Tribunal, the supplier may still not issue the aforementioned invoices once the period granted by the Tribunal has elapsed.
In this case, a new letter must be sent to the Economic-Administrative Tribunal that issued the Resolution, informing it that the ruling contained in its Resolution has not been complied with and that it will be the company or business recipient of the services that will issue the invoices on behalf of the supplier. This issuing of invoices is done in a similar way to what is done when the supplier authorises the recipient of the operation to issue invoices on its behalf, and the issuer-recipient of the service must send a copy of the invoices issued to the supplier that provided the service.
- In addition, the recipient of the service must submit a letter to the State Tax Administration Agency informing it of all of the above, i.e. (i) that there is a Resolution of the Economic-Administrative Court that obliged the supplier to issue these invoices and that this has not been complied with, (ii) that the Court itself has been informed of this and that (ii) it is the company receiving the service itself that has therefore issued the invoices on behalf of the supplier that provided the service, and a copy of the invoices already issued must be attached to the aforementioned letter.
From that moment on, the recipient of the service would already be in possession of valid invoices that would cover the deductibility of the expense both for VAT purposes and for Corporate Income Tax or Personal Income Tax purposes.
It is also important to remember that input VAT payments are deductible from the moment they are accrued, provided that all the requirements for this are met, and can be included in the VAT return-settlement for the period in which they are incurred or in any other within the following 4 years, so that once the valid invoices are in possession of the aforementioned VAT payments could be included in the next VAT return-settlement to be filed.
· Does this procedure apply to other cases?
Indeed, the economic-administrative claim is the way to resolve any type of dispute, in fact or in law, related to the issuing, rectification or remission of invoices, so it would also be useful in those cases in which the supplier refuses, for example, to rectify an incorrect invoice already issued.
Similarly, it also covers the issuer of invoices who finds himself, for example, in a situation where the recipient of the service refuses to pay the output VAT. In this case, it is the person supplying the service who would bring the claim.
In any case, given that this type of process is somewhat complex and it is necessary to ensure that no legal deadline is exceeded, which would prevent the final objective of obtaining valid and complete invoices, we always recommend that you consult professionals you trust beforehand.