Certificate of taxable person status

VAT is a tax associated with the consumption of goods and services that is there and we have to pay most of the time. But not always. There are a number of professional activities that can benefit from VAT exemptions.

VAT exempt invoices are those that in principle would be subject to VAT, but the law determines that they are exempt due to the type of activity. A journalistic collaboration, for example, is a professional service and as such the invoice should carry VAT. But as the activity is one of those established as exempt by law, it does not.

On the other hand, it is said that invoices are not subject to VAT when this tax is not applicable to the transaction. An example would be the sale of second-hand real estate between individuals or the services provided to work cooperatives by their members. You can see more cases in this link of the Tax Agency.

Due to their marked differences, especially in terms of tax treatment and deductibility, a distinction must be made between two types of invoices depending on VAT exemptions: full exemptions and limited exemptions.

How to apply for a VAT exemption certificate?

Request by electronic data transfer through AFIP’s web page, option Access with Fiscal Code service “Certificates of Exclusion Ret/Percep of VAT and Certificates of Exclusion Percep of VAT – Customs”.

What is the VAT certificate?

The VAT Certificate is an official document issued by the Tax Agency, which serves to accredit the VAT return data. A VAT Certificate is a document issued by the Tax Administration that certifies facts relating to the tax situation of a person liable for tax.

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How to know if you are VAT exempt?

Sales, rentals, rendering of services or imports of goods included in these categories will be exempt from VAT: Books, brochures, newspapers, magazines and similar publications, in any format and throughout the marketing and distribution chain.

VAT taxable person certificate

In most EU countries, some businesses can apply for a special scheme that allows them to trade under certain conditions without incurring VAT. If your company makes taxable supplies of goods or services below a certain annual limit, it may be exempt from VAT. In that case, you will not have to pay VAT to the tax authorities, but you will not be able to deduct input VAT or include the tax on invoices. If you prefer, you can voluntarily opt for the normal VAT regime: if so, you will have to pay VAT, but you will also be able to deduct input VAT accordingly.

*Euro reference exchange rates published by the European Central Bank on March 23, 2018 (except Romania, where the thresholds expressed in RON are based on the euro values for special schemes at the exchange rate on the date of accession, i.e. 1.1.2007).

What is a taxable person certificate?

The VAT Taxpayer Status Certificate is an official certificate, issued by the Tax Agency, which certifies that the individual or legal entity is jointly and severally liable for the payment of a tax obligation of its own or of third parties, through its commercial operations carried out by the taxpayer….

How much VAT is withheld from microenterprises?

A Natural Person, Company or Microenterprise must withhold 30% of VAT on Goods, 70% of VAT on Services and 100% of VAT on certain payments established in this resolution N°61, article 4, e.g. for renting real estate to a Natural Person, Professional Services, all purchases and services liquidations, …

What does not liable for VAT mean?

A person is not liable for VAT if he/she does not perform an activity taxed with VAT, and if he/she performs any taxed activity, then he/she will be liable for such tax, but may register as not liable if he/she complies with the requirements set forth in article 437 of the tax statute in its paragraph 3.

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Who are exempt from VAT

Until the entry into force of this Law on January 1, 2013, entities wishing to apply any of the specific exemptions for non-profit entities had to request prior recognition from the Tax Agency to prove that they met the requirements established to be able to do so.

The new regulation modifies the wording of Articles 20.1.6 and 12 and Article 20 of the VAT Law, eliminating the requirement of prior recognition of the right to exemption by the Tax Administration.

Consequently, all entities that meet the requirements to be considered as social entities will be automatically exempt. (But it is not necessary to request it, only to decide oneself if it meets them).

The entities that meet these conditions, regardless of whether or not they requested the recognition of the exemption, can apply the exemption without requesting prior authorization or declaration by the AEAT.

Unless there is a better opinion, the Tax Agency (AEAT) no longer issues certificates of this nature. It is enough to access the electronic headquarters (www.agenciatributaria.es) and consult the procedures that can be carried out to be convinced of this fact.

Who is eligible for the taxable person?

Reverse charge occurs when it is the recipient who must comply with the tax obligations relating to VAT, as stipulated in Article 84.2 of the VAT Law. In other words, it is the customer who is responsible for the self-assessment of the VAT on the invoice.

How do I know if a company is a VAT taxable person?

– Legal entities not acting as entrepreneurs or professionals shall be considered taxable persons when they are recipients of mediation services in the name and on behalf of third parties, professional services related to works, reports, appraisals and opinions on movable property….

When does a microenterprise retain?

For the categorization of micro-enterprises, those taxpayers with gross income of up to USD. 300,000 and that at the date of generation of the cadastre have up to 9 workers. The amount of income will prevail.

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Certificate of exclusion of vat

It is used to accredit the activity or activities carried out or has been carried out by the owner of the data corresponding to the fiscal year for which the information is requested and which will be indicated when making the request.

Urban: municipality, address, cadastral reference, receipt number, cadastral value, percentage of ownership and type of ownership (owner, administrative concession, surface right, usufruct or bare ownership).

If the result is positive, it means that the owner of the data complies with his tax obligations for the period indicated. If it is negative, it means that he/she does not comply with all his/her obligations for that period. In this case, the non-compliance will be indicated (e.g.: a certain tax return has not been filed, despite the obligation to do so).

It serves to accredit compliance with tax obligations by contractors and subcontractors for the purpose of exempting their contractors from the subsidiary liability provided for in Article 43.1.e) of the General Tax Law. *

By Rachel Robison

Rachel Robison is a blogger who collects information on court filings and notices.