In my previous posts on French and Spanish tax I have used the Star Wars analogy with regards to the Tax Office´s treatment of the small business taxpayer. Well sad to say, but in Spain the Empire continues to tighten its grip.
The annual informative declaration of transactions with third parties, Modelo 347, is a rather clever tool introduced by the Agencia Tributaria a few years back to ensure tax and VAT compliance among small businesses. Any supplier or customer with whom you the taxpayer has transactions totalling more than 3,005 Euros in the year must be included in this declaration. As Hacienda can cross-check between declarations, the taxpayer runs a risk of and enquiry inspection if they make any omissions.
In principle this is a clever way to ensure that businesses declare all income, and do not overstate expenditure for tax and VAT purposes. Where our objection, and that of Spanish professional accountants´ organisations, including of own- the AECE , is in the tight filing deadlines.
Originally 31st March, this was changed last year to 28th Feb and now it is proposed that from 2018 the deadline will be 31st January ! This gives the small business only one month from the close of the year to prepare the return, at a time when they also have other annual tax obligations with a similar deadline- annual informative returns for VAT and tax retentions.
And as is standard in Spain, Hacienda are ruthless with the poor person that misses the deadline. No reminder letter if the deadline is missed, no forgiveness for the first transgression. As usual, the taxpayer can expect an automatic penalty fine with no excuses accepted.
The cynic might say that these changes in deadlines are designed purely to generate income in penalty fines. And I would find it difficult to argue !
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