VAT SETTLEMENT EXERCISES

General Regime

Mr. X has carried out the following economic activities during the year 2022:

- It manufactures stoves, mixers, coffee makers, vacuum cleaners, refrigerators, dryers,

fans, washing machines, etc. This activity is included in section 345 of the Tax on
Economic Activities (“manufacturing of household appliances”).
.

Taxation by Value Added Tax:

- For the manufacture of household appliances, you are taxed under the general tax
regime.
The operations described in the scenario occur exclusively in the activity of manufacturing
household appliances.

The declaration for the 4th quarter of 2021 resulted in compensation of 3,000 euros.

In operations, we will assume that the tax is not included in the price unless, by legal
precept, it must be understood otherwise or otherwise expressly indicated.

FIRST QUARTER OPERATIONS

1. He buys engines from a Spanish businessman for 36,000 euros.

HI: delivery of goods made by a businessman.
Input VAT: (36,000 x 21%) .........................................................................................7,560 euros
2. Purchases sheet metal from a German manufacturer for 18,000 euros.
HI: intra-community acquisition of goods.
VAT accrued and borne: (18,000 x 21%) ....................................... .....................3,780 euros
3. Receives services from a lawyer for 6,000 euros.
HI: provision of services carried out by a professional.
Input VAT: (6,000 x 21%)........................................................................ ...................1,260 euros
4. You receive the invoice for the transportation carried out by a German carrier for the
transfer of the goods in point (2) whose amount amounts to 3,000 euros.
HI: provision of services carried out by an entrepreneur.
The service is understood to be carried out entirely in the territory of application of
the tax as it is an intra-community transport of goods whose recipient is a
businessman or professional.
The reversal of the taxable subject occurs because the provider is not established.
VAT accrued and borne: (3,000 x 21%).....................................................................630 euros
5. He pays 5,000 euros to rent the premises where he carries out his activity.
HI: provision of services carried out by an entrepreneur.
Input VAT: (5,000 x 21%)............................................................................. ..............1,050 euros

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6. Purchase screws in Morocco for 12,000 euros.
HI: import.
The VAT accrued is paid at customs, so it only appears as input VAT on the self-
assessment. You cannot opt for deferral.
Input VAT: (12,000 x 21%)............................................................................ .............2,520 euros
7. Sells household appliances to a wholesaler for 55,000 euros.
HI: delivery of goods made by a businessman.
VAT accrued: (55,000 x 21%).......................................................................... .......11,550 euros
8. Invoice for assemblies and arrangements in sales made to individuals 4,000 euros.
HI: provision of services carried out by an entrepreneur.
VAT accrued: (4,000 x 21%)....................................................................... ...................840 euros
9. It sells household appliances to merchants under the special equivalence surcharge
regime for 24,000 euros.
HI: delivery of goods made by a businessman.
Because the recipient is subject to an equivalence surcharge, the VAT and the
surcharge must be charged to them on the same basis.
VAT accrued at 21%: (24,000 x 21%)................................................................... .5,040 euros
Equivalence surcharge: (24,000 x 5.2%)............................................................. ..1,248 euros
10. He sells household appliances in Morocco for 12,000 euros.
HI: delivery of goods made by a businessman.
The delivery will be exempt because the goods are dispatched or transported outside
the Community by the transferor, that is, it is an export.

SECOND QUARTER OPERATIONS

11. Purchase pieces in Japan for an amount of 36,000 euros.

HI = import of goods.
Input VAT: (36,000 x 21%)............................................................................. ............7,560 euros
12. Sells appliances to wholesalers for 70,000 euros, a discount of 3,000 euros is agreed
given the amount of the order.
HI= deliveries of goods made by a businessman.
The discounts granted at the time of carrying out the operation and based on it are
not included in the consideration that constitutes the taxable base of the tax.
VAT accrued: (67,000 x 21%)........................................................................ .........14,070 euros
13. They provide you with a machinery repair service for 30,000 euros. Payment is
pending, but you have already received the invoice. For the deferral of payment, they
also charge you 600 euros of interest included in the invoice.
HI: provision of services carried out by an entrepreneur.
The time of payment is irrelevant as long as it is after accrual.
Interest is not included in the tax bases as it is after accrual, is usual in the market and
is stated separately on the invoice.
Input VAT: (30,000 x 21%) = 6,300 euros.

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14. Sells household appliances to merchants at an equivalence surcharge for 12,000
euros.
HI: delivery of goods carried out by a businessman.
VAT accrued at 21%: (12,000 x 21%)......................................................................2,520 euros
Equivalence surcharge: (12,000 x 5.2%)....................................................................624 euros
15. Purchase manufacturing machinery for 1,800 euros.
HI: delivery of goods carried out by a businessman.
In no case will it be considered an investment good as it is less than 3,005.06 euros.
Input VAT: (1,800 x 21%).................................................................................. .............378 euros
16. Receives services from a lawyer established in France for 3,000 euros.
HI: provision of services carried out by a professional.
The operation is understood to be carried out in the territory of application of
Spanish VAT because the recipient has the status of businessman or professional and
the headquarters of his activity is in said territory.
The reversal of the passive subject occurs because the provider is not established.
VAT accrued and borne: (3,000 x 21%).....................................................................630 euros
17. Sells products to a Japanese businessman for 9,000 euros. The availability is made in
Japan.
HI: delivery of goods made by a businessman.
Exempt operation due to the goods being dispatched or transported outside the
European Union by the transferor.
18. Pay a Spanish carrier 1,200 euros.
HI: provision of services carried out by an entrepreneur.
Input VAT: (1,200 x 21%).................................................................................. .............252 euros
19. Purchase pieces in Holland for an amount of 18,000 euros.
HI: intra-community acquisition of goods.
VAT accrued and borne: (18,000 x 21%)...............................................................3,780 euros
20. Receives advances from clients of 6,000 euros.
HI: delivery of goods made by a businessman.
The collection of advance payments implies the accrual of VAT.
VAT accrued: (6,000 x 21%)............................................................................ ..........1,260 euros
21. He carries out repairs worth 6,000 euros on the appliances he has sold.
HI: provision of services carried out by an entrepreneur.
VAT accrued: (6,000 x 21%)........................................................................... ...........1,260 euros
22. Purchase manufacturing machinery for an amount of 5,100 euros, obtaining a
discount for prompt payment included in the invoice of 100 euros.
HI: delivery of goods made by a businessman.
Discounts granted at the time the operation is carried out and based on it are not
included in the tax base.
Input VAT: (5,000 x 21%) .............................................................................. ............1,050 euros
23. He sells products to a French merchant for 12,000 euros.
HI: delivery of goods made by a businessman.
Exempt operation because the assets are destined for another Member State.
24. They provide repair services for certain investment assets worth 24,000 euros.
HI: provision of services carried out by an entrepreneur.

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 They are not considered investment assets because they are executions of work for
the repair of investment assets.
Input VAT: (24,000 x 21%).............................................................................. ...........5,040 euros
25. Return defective products purchased in point (19) to Holland for 6,000 euros.
The rectification of the VAT accrued and input takes place.
VAT accrued and supported: (-6,000 x 21%).....................................................-1,260 euros

26. Win a public contest to install appliances. Delivery will be made in the month of
November. Award amount: 108,900 euros.
HI: delivery of goods made by a businessman.
Accrual: when the assets are made available in the month of November.
In the economic proposal, the tax is understood to be included in all cases:
Tax base: (108,900 ÷ 1.21) .................................................................................. ...90,000 euros
VAT: (90,000 x 21%)........................................................................... .......................18,900 euros
27. Of the sales made in the second half of 2017, one of them has been resolved for an
amount of 7,260 euros, VAT included, resulting in the return of the goods.
The accrued VAT is rectified.
Tax base: (7,260 ÷ 1.21) .................................................................................... ........6,000 euros
VAT accrued: (-6,000 x 21%).......................................................................... ........-1,260 euros

THIRD QUARTER OPERATIONS

28. Free delivery of appliances worth 6,000 euros.

HI: delivery of goods made by a businessman (self-consumption).
The tax base is made up of the cost of the goods.
VAT accrued: (6,000 x 21%) ........................................................................... ..........1,260 euros
29. Engine purchases for 18,000 euros, you do not receive the invoice until the fourth
quarter.
HI: deliveries of goods made by an entrepreneur.
VAT will be deductible when you receive the invoice.
30. Sell an appliance to an individual for 3,000 euros.
HI: delivery of goods made by a businessman.
VAT accrued: (3,000 x 21%)............................................................................... ...........630 euros
31. Import sheet metal from a manufacturer for 6,000 euros.
HI: import of goods.
Deductible input VAT: (6,000 x 21%) ....................................................................1,260 euros
32. It sells to merchants under the special equivalence surcharge regime for 24,000 euros.
HI: delivery of goods made by a businessman.
VAT accrued at 21%: (24,000 x 21%).................... ................................................5,040 euros
Equivalence surcharge: (24,000 x 5.2%)................................................................1,248 euros
33. Sells household appliances to businessmen for 41,000 euros. The invoice includes 500
euros for transportation and another 500 euros for insurance.
HI: delivery of goods made by a businessman.
The tax base includes any effective credit in favor of the person making the delivery.
VAT accrued: (42,000 x 21%)........................................................................... .........8,820 euros
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34. Purchase goods to give to clients for 1,200 euros.
HI: delivery of goods made by a businessman.
Fees incurred as a result of the acquisition of goods and services intended for
customer service are not deductible.
35. He sells goods to an Italian individual for 1,200 euros.
HI: delivery of goods made by a businessman.
It is not an exempt intra-community delivery because the recipient is a private natural
person.
VAT accrued: (1,200 x 21%)............................................................................. ...........252 euros
36. Makes an intra-community acquisition from Belgium of current goods for 12,000
euros.
HI: intra-community acquisition of goods.
Output and input VAT: (12,000 x 21%)..................................................................2,520 euros
37. On September 30, he sells household appliances to a French company for 18,000
euros. The goods do not leave the territory.
HI: delivery of goods made by a businessman.
The operation is not exempt because the goods do not leave the territory and it is an
essential requirement
so that it is an exempt intra-community delivery.
VAT accrued: (18,000 x 21%)................................................................. ...................3,780 euros
38. Return of merchandise sold this year in Spain for 6,000 euros.
VAT accrued: (- 6,000 x 21%).............................................................. ..................- 1,260 euros
39. You have expenses for participating in an exhibition in the amount of 1,200 euros.
HI: provision of services carried out by an entrepreneur.
Input VAT: (1,200 x 21%)........................................................................ .......................252 euros
40. The insurance company that insured the operation of point (33) invoices you 500
euros.
HI: provision of services carried out by an entrepreneur.
The operation is exempt from tax.

FOURTH QUARTER OPERATIONS

41. Buy pieces for 60,000 euros. They pass on 10% instead of 21%.
HI: delivery of goods made by a businessman.
You cannot deduct more than what has been passed on to you.
Input VAT: (60,000 x 10%)........................................................................... ..............6,000 euros
42. Send an advance payment to a Spanish supplier for 12,000 euros.
HI: delivery of goods carried out by a businessman.
Advance payments represent the accrual of the tax.
Input VAT: (12,000 x 21%)........................................................................... ..............2,520 euros
43. You get discounts for purchases in the first half of the year for an amount of 18,000
euros.
Input VAT: (-18,000 x 21%)........................................................................ .............-3,780 euros
44. Receives pending invoices for the third quarter for 18,000 euros.
Input VAT: (18,000 x 21%)........................................................................ .................3,780 euros
45. Sells appliances to retailers at an equivalence surcharge for 12,000 euros
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 HI: delivery of goods made by a businessman.
Output VAT: (12,000 x 21%)......................................................................... ............2,520 euros
Equivalence surcharge: (12,000 x 5.2%)....................................................................624 euros
46. The goods from point (30) are returned, rendering the operation void.
Output VAT: (-3,000 x 21%)......................................................................... ..............-630 euros
47. Send an advance payment to an Italian supplier for 6,000 euros.
Advances on intra-community acquisitions do not accrue VAT.
48. Exports for 12,000 euros.
HI: delivery of goods made by a businessman.
It is a tax-exempt delivery.
49. The transaction carried out with the city council in the second quarter is accrued
[point (26)].
VAT accrued: (90,000 x 21%)..................................................................... ...........18,900 euros
50. He buys an apartment from a private individual for 90,000 euros to use it as an office.
Delivery of goods not subject to VAT because it is not carried out by a businessman
or professional.
51. Sells the manufacturing license to a Portuguese company.
Provision of services not subject to Spanish VAT because it is not understood to be
carried out in the territory.
52. He sells a warehouse to an individual for 72,000 euros.
HI: delivery of goods made by a businessman.
Exempt delivery as it is the second delivery of buildings (without the possibility of
waiver).
53. Purchases engines from Spanish businessmen for an amount of 72,000 euros.
HI: delivery of goods made by a businessman.
Input VAT: (72,000 x 21%)........................................................................... ...........15,120 euros