What are early payments?
At the moment, It is common, that the supplier company asks for advances to its customers. Normally, An advance is required on the total invoice or even for it total amount.
Mainly, is motivated to avoid delinquency, Some companies also request it to obtain short -term liquidity or when deliveries of goods or provision of long -term services are offered, For example, The construction of a home.
Now, It is crucial to understand how this payment modality works and what are the fiscal implications that it entails when it is decided to issue an invoice due to an early payment.
How and when to bill your customers
As for VAT, When a client is requested to make an early payment, On the one hand, of the total invoice or by the total invoice, A very common mistake is not to include the corresponding VAT in that advance. As a general rule, The VAT Law, establishes the tax accrual when the acquirer takes place (Delivery of goods) or when they lend themselves, Execute or perform the taxed operations (provision of services). For the specific case of early payments, VAT Law in section two of the article 75 He tells us:
"Operations subject to tax that originate anticipated payments prior to the realization of the taxable fact of the tax will be accrued at the time of total or partial collection of the price for the amounts actually perceived"
Therefore, Every time a customer is asked for a payment in advance, The corresponding invoice with VAT must be issued.
What happens when anticipated payments are produced in successive tract operations?
For this case we have a very clear example, Specifically, The leases: In this case the accrual occurs, As a general rule, When the payment of each perception is required. In the event that payments occur prior to the performance of operations, The tax will be accrued for the amount received by the lessor. Therefore, The landlord must have an VAT impact on his invoice in accordance with the early payment made.
Regarding Corporation Tax, The legislation, As a general rule, states that income and expenses will be charged with the tax period in which its accrual occurs, According to accounting regulations, and regardless of the date of collection or payment, respecting the correlation of income and expenses.
What happens when an invoice is received prior to the provision of the service?
A clear example is the reception of an advertising invoice in which the announcement is published the year following the reception of this.
As we have previously commented, It will be charged in the tax period in which the accrual occurs. According to the temporary imputation of spending, derived from an advertising contract, It must be carried out in the tax period in which the service is received, that is to say, When the announcement is published.
In the case of the Corporation Tax and the Income Tax of natural persons (IRPF), You can deduce the expense once you have registered it accounting.
Nevertheless, When choosing this alternative, It is essential that you ensure rigorously with all the legally provided requirements. That's why, in Vázquez and Manchón, Fiscal Advice experts, Accountant and Labor based in Almería, We are here to help you with the fiscal planning of your SME through early payments, y, What is even more crucial, To avoid possible sanctions.
