When the vendor or service provider prepares the invoice, the invoice must reflect the fact that it is a reverse charge transaction. The invoice must therefore be issued without VAT and must include the statement “Transaction with reverse charging pursuant to article 84.I.2 of Law 37/1992”. The invoice issuer must include these amounts on form 303 as information in the section on “operations not subject to tax or with reverse charging that give the right to the deduction”, with the sum of the amounts reflected on form 303 transferred to form 390 in the section on “operations not subject to tax due to localization rules or with reverse charging”.
On the other hand, the recipient of the invoice, as explained above, will be the person liable for the tax, and must record the invoice received with reverse charging so that the taxable base from it is declared on form 303 as part of the VAT accrued, in boxes 12 and 13 on the form, and in the corresponding boxes in the deductible VAT.
New aspects from Law 28/2014 of November 27 in relation to Law 37/1992, on reverse charging.
Beginning on April 1, 2015 with the tax reform, the situations where reverse charging is applicable were expanded, so that recipients of deliveries of some of the following goods and assets have become the persons liable for the tax:
- Silver, platinum, and palladium, whether raw, powdered, or semi-worked; also includes deliveries of such metals in relation to the performance of transformation activities by the acquiring businessperson or professional. In all cases this must involve products that are not included within the scope of application of the special regimen applicable to second-hand goods, objects of art, antiques, and collectibles.
- Cell phones.
- Videogame consoles, portable computers, and digital tablets.
- The contents of these last two points will only be applicable when the recipient is:
- A businessperson or professional re-selling these goods or assets, regardless of the amount of the delivery.
- A businessperson or professional other than those referred to in this section, when the total amount of the deliveries of such goods or assets made to this person, and as documented on the invoice itself, exceeds €10,000, excluding VAT.
New types of violations and sanctions are also established (articles 170.II.6-8, 171.I.6-7, and 171.II of the Law on VAT), for failure to provide notification, or for providing incorrect notification, regarding certain transactions where the reverse charging rules are applicable because of their status as businesspersons or, as the case may be, because of the nature of the construction work (work executed for construction or renovation of buildings or urbanization of land areas and real estate transfers by execution of a guarantee). Such conduct will be sanctioned with a proportional, punitive fine of 1% of the total payments with respect to which a notification violation took place, with a minimum amount of €300 and a maximum of €10,000.