Start of main content

The Immediate Submission of Information on VAT

| News | Tax

Th Immediate Submission of Information came into force on 1 July, 2017, a new VAT record keeping system

If you are reading this, and your company has not yet adapted its software programmes to the new Immediate Submission of Information on VAT system, even though it is mandatory for your company, you are probably going to find yourself facing a serious problem. This is because this new VAT record keeping system, which came into force on 1 July, 2017, is going to entail significant changes for companies which are obliged to apply it by law, as well as those that opt to apply it voluntarily.

The Immediate Submission of Information on VAT (SII) is a new system for keeping VAT invoices in which invoice billing details must be registered online at the AEAT (Spanish tax authorities) website. Its main objective is to decrease the period of time between when an invoice is recorded and when the underlying transaction is performed. The system has a dual purpose: to encourage companies to use new technologies and, most importantly, to fight against and prevent VAT fraud. This is not a new obligation. Instead, it is a new system, or method, for complying with an existing obligation. Under this system VAT taxpayers do not have to send the actual invoices, but only the billing details.

With the introduction of this new obligation several existing reporting requirements have been eliminated (forms 347, 340 and 390), while the deadline for filing tax returns and settlements has been extended by 10 days for VAT taxpayers that apply SII. This is only logical as, if you analyse the SII, you can see that almost all the information which was reported in the above forms must now be reported under the SII system. In addition, the new system also requires the reporting of new information which will give the AEAT greater and more immediate control over transactions made by VAT taxpayers.

The SII system was initially scheduled to come into force on 1 January, 2017, although there was a delay and it did not come into effect until 1 July, 2017. However, according to a mandatory retroactive requirement all VAT taxpayers that apply SII must send their invoicing records for the first half of 2017, although the quantity of data that must be sent in this case is smaller, while taxpayers registered with the monthly VAT refund scheme (REDEME) are exempt.

SII is mandatory for enterprises and professional workers who had a turnover of over 6,010,121.04 euros in the previous year, VAT taxpayers that have opted for the monthly VAT refund scheme (REDEME), and entities that form part of a VAT group (REGE).

Companies that were registered with the REGE or REDEME regimes have had the option of opting out of these regimes, and those that have opted out are not obliged to apply SII. This exceptional opt-out deadline finalised on 15 June, although if a company wants to opt out of SII in the future, it can do so during the opt-out periods established by the regulations, which is usually in November of each year.

On the other hand, if you want to be included in the SII system, even though it is not mandatory for your company, you can apply by submitting the corresponding form in the month of November prior to the year in which it will take effect, unless you applied to be included in the SII system in the exceptional opt-in period which ran from 1 to 30 June, 2017. However, this is not something which I would recommend. In my opinion the two most important features of this new system are the deadlines for submitting the billing records, and the quantity and quality of the information to be provided.

As a general rule, with respect to the submission deadlines, billing details must be sent to AEAT within four working days as from the emission of an invoice or the recording in the books of an invoice received. Exceptionally, this period has been extended to eight days for 2017. The final deadline for both issued and received invoices is the 16th of the month following the one in which the VAT was accrued. For this reason I strongly advise that VAT taxpayers review the regulations applicable to VAT accrual, and the time limits for the issuance of invoices, in order to avoid the late reporting of data. In general, the tax accrual rules for deliveries of goods and the provision of services are not the same, while the time limits for the issuance of invoices vary, depending on whether the other party in the transaction is an enterprise or a professional worker. This is why I recommend that all VAT taxpayers should review these issues with their tax consultants. The invoice data that has to be sent comprises all the information that was mandatory prior to SII, as well as a substantially increased number of invoice data fields. When filling in some of these fields taxpayers should take into account the data provided by the other party in the transaction, as if they also apply SII the information will automatically be cross-referenced.

Lastly, the SII regulations have established a system of penalties and fines which, basically, punish the late reporting of data. The fine set will be equivalent to 0.5 percent of the invoice amount, with a quarterly minimum of 300 euros and a maximum of 6,000 euros. What is striking about this system is the lack of proportionality. A VAT taxpayer that reports the billing details of a single invoice for 40 euros outside the specified deadline will have to pay a fine of 300 euros, even though 0.5 percent of this amount is 20 cents, whereas a VAT taxpayer that sends the data for an invoice of 10 million euros late will only have to pay a fine of 6,000 euros, even though 0.5 percent of this amount is 50,000 euros.

One thing is certain. All VAT taxpayers who have to apply SII, whether they are an enterprise or a professional worker, will need to study the legal implications of this new system carefully. They will also, and most importantly, have to review their tax declaration and compliance system in order to know exactly what information they have to provide, and work in close collaboration with their software suppliers, as the software used will be essential to achieving compliance with this obligation.


For further information, please contact

Miguel Ángel Galán


Read the article in El Economista

End of main content