VAT on imports for 2024. November is the time to plan, do not miss the dead-line

When doing imports into Spain, the corresponding VAT is liquidated by Customs and is to be paid before the goods are cleared to free circulation except for the case that the import qualifies for any exemption (i.e. the so called regime 42 where the import is followed by an intracommunity supply or the goods are affected to an special Customs regime).

Since the recovery of import VAT is to be obtained by way of compensation at the corresponding periodical VAT return, this procedure involves a financial cost when, as is normally the case for non-established companies eligible to the reverse charge rule on their local sales, there is not VAT chargeable and the return results in a receivable amount. For such a scenario and for companies obliged to file quarterly VAT returns (in principle, those with a turnover under 6 million Euros, unless they have applied for registration at the, so called REDEME or Register on Monthly Refunds), the refund must be applied for in the VAT return for the fourth calendar quarter of the year.

Since this return is to be filed in January the following year and the tax regulations allow the tax authorities 6 months to complete the refund, the financial cost corresponding to the time lapsed between the payment of VAT when the import takes place and the moment when the VAT refund is obtained can be significative.

So to eliminate this cost, companies are given the possibility to opt for a especial deferral regime for the payment of import VAT which allows to liquidate the VAT of imports made during a calendar month by its inclusion as VAT charged in the corresponding monthly VAT return, with the possibility to also include as input VAT the same amount in said return.

The option is to be made during the month of November by filing the corresponding census application at the web site of the Spanish Tax Agency (AEAT). The effects of the option will commence the 1^st January of the following year and will continue to apply until a renounce application is filed at the census during the month of November previous to the year when the renounce it to have effect.

Given the proximity of the 30^th of November, those companies in a VAT receivable situation which incur in significant input VAT as a result of the imports they carry out in Spain, should consider exercising the option to the mentioned special regime of the deferral of VAT of imports before such a dead-line, for the case that they have been obliged to file monthly VAT returns in 2023 and maintain this obligation during 2024.

It is to be noticed that the option could not be exercised with effect in 2024, regardless of the fact that the company, having filed quarterly VAT returns during 2023, is to change its status since 1^st January 2024 and will have to start filing monthly VAT returns (i.e. due to the fact that they become “big companies” for having exceed the 6 million Euros turnover during 2023 or because it applies for registration at the REDEME) as, for this case, the application for the special deferral regime will have to wait until November 2024 and will have effect since 2025.

Until then, there would still be the possibility to reduce the financial cost resulting from the delay of the recovery of the import VAT by applying for the mentioned registration at the REDEME, which would result in the obligation to file monthly VAT returns with the possibility of applying for the VAT refund in a monthly basis. Those companies wanting to benefit from this special monthly refund regime since 1^st January 2024 would need to file a census application before the 30^th of November or before the dead-line for the filing of the fourth quarterly VAT return of 2024 (January 2024).