As a result of our article Buy-to-Let, Landlord Tax Reliefs is the backbone of claiming tax relief on property owners. As explained in previous articles on vacation rentals, landlords can claim all expenses (including lawyer's duties for the preparation of the quarterly accounts) from their tax bill on average 70% or more.
The 'trick' to reduce your rental income tax bill significantly is for suppliers to provide you with proper VAT bills. In this short blog post we will examine the requirements to be met by the Spanish Tax Office in order to accept a VAT invoice. apartments
Many suppliers are very reluctant to contact you (because they work off the books and do not pay any taxes). You can typically ask the following question in Spanish: "With or without an invoice?" You must always answer, "With, please." Others will provide you with a "factura" only to satisfy you, but you will lack key elements, i.e. missing VAT, customer's name and personal details, not mentioning customer's tax, no invoice number, service etc. For tax relief purposes, a VAT invoice that lacks the key elements cannot be claimed.
By law, all VAT invoices for which you claim landlord tax relief over the next five years must be stored. This is the case if you land with a fiscal inspection, which requires you to produce copies of all the VAT invoices on which you claimed tax relief.
We will collect the key elements of a proper VAT invoice on the today's tax blog (factura). The Spanish Tax Office lists in detail the full requirements on its website. In this blog, for the sake of simplicity, we will give only a brief outline on the main points.
VAT invoice anatomy (factura)
1. Invoicer's personal details
Name full and surname.
The name of the company.
NIF trader/service provider number; CIF number, if a company.
Address. Address.
2. Facture number for VAT. i.e. 37/2021
3. Personal invoice details
Name full and surname. Name full.
The name of the company.
Number of personal taxes: NIF or NIE.
Address.
4. Date of service
5. Brief service description
6. Value added tax breakdown i.e. 21 percent
7. Total payable amount, including top VAT.
8. Rubber-stamp seal of the company (optional)
Only tax relief claims on proper VAT invoices are accepted by the Spanish Tax Office. If the VAT invoice you were handed over does not comply with all of the above, the tax office will refuse it and we cannot claim tax relief on your behalf when we submit your tax return.
We remind taxpayers that the tax office cannot accept tax deductible till tickets from supermarkets, commercial centers and tank stations. Only correct VAT invoices like those above.
At LNA we reduce our customer's tax bills by 70% or more, on average, for all vacation rentals. Contact us today. Contact us today.
We at LNA can help you to purchase, sell or rent your property in Spain. We have 17 years of transport & tax experience. We are also specialized in permits for immigration and residency. Small on fees, big on service. Larraín Nesbitt Abogados.