Billing and Invoices

• Billing is the focus
• The documentary process formalizes the budget, order, and delivery note, culminating in the issuance of the invoice

General Information

• The billing regulations mandate that businesses and professionals issue invoices and copies for the delivery of goods and services performed during their activity
• Issuing invoices for payments received before the goods are delivered or services are performed is also required

Invoice Types

• The billing system based on two invoice types, full or ordinary and simplified
• A proforma invoice is used in international commerce and issued by the exporter
• A proforma invoice provides the buyer with complete information on the elements of the operation
• A proforma invoice is not a real invoice; it is an advance of what the real invoice will be

Full or Ordinary Invoices

• All invoices and copies must contain the following information:
• Number and series must be correlative within each series
• Different series can be established when reasons justify it or if there are several establishments, or operations of a different nature are carried out
• The issue date is required
• The date of completion of the documented operation is needed if it does not coincide with the issue date
• The tax identification number (NIF), name and surnames, or business name of both the issuer and the recipient is important
• Domicile of the sender and recipient are needed
• A description of operations and all necessary data for determining the taxable base, its amount, and unit price without tax is compulsory
• Any discount or rebate not included in the unit price is relevant
• The tax rate(s) applied to the operations must be included
• The tax amount must be stated separately
• The headquarters of activity or establishment to which the operations refer is needed when the obligated party to issue the invoice, the recipient of operations, or both have several fixed places of business

Other Data

• Other data is reflected where imports can be expressed in any currency if the VAT fee is expressed in euros
• Invoices can be issued in any language, and there is the possibility of demanding a translation into Spanish or another official language
• It is unnecessary for the issuer's signature or the place of issue to appear on invoices
• Invoices can be issued on paper or in electronic form, ensuring the authenticity of their origin, integrity of content, and legibility

Simplified Invoices

• Simplified invoices, which replace tickets, have reduced content compared to full invoices
• Information on the document’s usage is collected

When to Issue

• At the issuer's choice, issue when the amount of the invoiced operation does not exceed €400, VAT included
• When a rectification invoice must be issued
• Issue when the amount does not exceed €3000, VAT included, in the following transactions:
  • Retail sales
  • Sales or services in ambulances
  • Sales or services to the consumer's home
  • Transportation of people and their luggage
  • Hospitality and restaurant services
  • Services provided by dance halls and discotheques
  • Hairdressing and beauty institutes services
  • Use of sports facilities
  • Developing photographs and photographic services
  • Parking and parking of vehicles
  • Movie rentals
  • Dry cleaning and laundry services
  • Use of toll highways

Electronic Invoices

• Electronic Invoice is the electronic document equivalent to the paper invoice and consists of a telematic transmission between the issuer and the recipient by electronic means
• The issuance condition of an electronic invoice is contingent upon the recipient giving consent
• The recipient's consent is a tacit agreement if they receive the invoice electronically
• A document needs to fulfill requirements and be signed with an advanced electronic signature based on a recognized certificate to be legally valid
• The advanced electronic signature is the set of data attached to an electronic message to identify the issuer of the message as its legitimate author, as if it were a handwritten signature

Recapitulative Invoice

• The possibility of issuing invoices for monthly periods that include operations carried out on different dates with the same recipient is possible
• The operations must have been carried out within the same calendar month when the operations were documented and must be issued no later than the 16th of the following month

Duplicates and Copies

• Duplicates can be issued in the following cases:
• Under any loss of the original
• When several recipients concur in the same operation, the part of the taxable base and the fee passed on to each of them must be indicated on the original and on the duplicates
• Each duplicate must contain the expression "duplicate" with the same validity as the originals
• A copy of an invoice makes it indistinguishable from the original

Exceptions

• An obligation to invoice in the following transactions:
• Those made by retailers to whom the special surcharge scheme applies
• VAT exempt transactions (except health, real estate and technical services)
• Those made by taxable persons who are taxed under the special simplified VAT scheme
• Those carried out in the development of activities covered by the special scheme for agriculture, livestock, and fisheries

Invoice Issuance

• The following deadlines for issuing and sending invoices to customers.
• A recipient who is neither a business nor a professional at the time of the operation.
• A recipient who is a business or professional and acts as such- before the 16th day of the month following the date on which the goods or services invoiced are considered delivered

Timeframe

• Summary invoices have to be made 16 days before the month ends
• If the recipient is an owner or professional that operates as such, it should be done before the 16th of the month
• If they are not there is also a need to ensure the operations are documented

Retention of Invoices

• Entrepreneurs or professionals must retain the following documents and the obligation to retain it can be fulfilled by electronic means
• The obligations can be materially fulfilled by a third party acting in the name and on behalf of the entrepreneur or professional, who’s responsible for compliance with all retention obligations
• Invoices can be requested by various agencies at any time, because this documentation has commercial and fiscal effects so the conservation should be as follows:
  • Under commercial regulations. The Commercial Code obliges entrepreneurs to keep accounting books, correspondence, documentation, and supporting documents for their operations for six years, from the date of the last entry made in the books
  • Under tax regulations. Timelimits for taxes are four years from the date the VAT return filed monthly or quarterly
• Tax crime: Five years or ten for aggravated version - Assets have to be kept for four years following the exercise of the last amortization.

Applying Value Added Tax (VAT)

• The value added tax accrues on the supply of goods and the provisions of services carried out by traders or professionals, and on imports and intra-community acquisitions of goods
• An invoice can be made if the tax rates applied in each operation and the procedure for its application is known
• The VAT rates currently in force are broken down into
  • General type is 21%
  • Reduced type is 10%
  • Super reduced is 4%

Surcharge

• There is a special VAT regime, called the special surcharge regime, which is applicable exclusively in the sale transactions
• Is developed by the suppliers as they charge a special fee, VAT included

Types

• Type VAT 21% is 5.20%
• Type VAT 10% is 1.40%
• Type VAT 4% is 0.50%

Vat Exempt

• An invoice is not issued to those who have it despite being subject to it, this occurs with medical assistance

Commercial Discounts

• Reduce the original price cause of promotions like sales etc
• Calculated based on the gross value of the product

Volume

• Volume is determined by the amount of purchases made whether in units of measurement
• This consists of two types:
  • Accumulation, which takes time into account
  • Non accumulative- specific purchase volume

Prompt

• Conceded for prompt payment or with an agreed timeframe

Service Billing

• Freelancers invoice the client and withhold income on the client's tax return
• Taxable income for freelancers is subject to VAT and personal income tax and are applied on proceeds that derive from work from freelancers who provide the business a service

Rates

• Current withholding tax
  • General rate: 15%
  • First three years: 7%
    • The withholding is paid by the customer to the tax office and if the customer happens to be themself issuing an invoice in the professional they should show "billing by the recipient"

Paid Expenses

• Professional and companies order and keep track of payments for those services
• The expense falls upon who ordered the funds and the client should reimburse those paid expenses
• A bill will be issued in that name, also the addressee can liquidate taxes with finance
• Invoices for service works will include payment
• Will not be included as part of the VAT of VAT holdings

Provisions

• Can be taken care of by professionals who ask for reimbursements, professional can receive money which will be known as payments of funds
• Professional will use the money to pay the customer and have a proof of use

Correct The Invoice in following events

• Not following regulations
• Incorrect setting of installments

Corrected Through

• Changing the tax base to account for changed costs for returns and operations.
• Done through new invoices and showing what was modified
• New isssued numbers as well and showing which of the documents is the correct amount.

Not Required

• To issue a corrected issue from previous errors of shipping items

Rectifying invoice process

- It needs to show which invoice is being replaced

Registering Invoices

• To write documents
• VAT must follow the books table.

Must have the following

• Sent books of received invoices
• If the company has multiple locations they can do different books as long that the locations are documented to follow regulations.

Timelines for payments

• Before its due date for VAT

Corrections

• Finalizing the payment it the correct due amount
• This can determine the payment for liquidation.

An overview of billing processes, focusing on the documentary aspects from budgeting to invoicing. It covers regulations for businesses and professionals requiring the issuance of invoices for goods and services. It also outlines the types of invoices, including full, simplified, and proforma invoices.