In Spain, any self-employed person or company has administrative obligations to the tax authorities. The VAT form 303 is one of the most familiar to business owners.
It is an essential document for complying with obligations with regard to VAT collection for the State.
That is why you need to know everything about form 303, to make sure you are doing the right thing and to check whether or not you are obliged to file it for carrying out an economic or business activity on your own account.
What is form 303 and what is it for?
Form 303 is a form (self-assessment) used for VAT returns. It is known as the “VAT form” by any self-employed person or company and, in it, a calculation is made between the difference between output VAT and input VAT, in addition to other boxes that are for information purposes.
In other words, it is based on the invoices received from suppliers and issued to customers and business expenses. The result can be a refund or a payment, or even zero if the two VAT rates coincide. If the result of the return is a refund, there is also the option, in the case of a refund, of requesting “compensation” in subsequent periods, when the result is expected to be a refund.
This may be advisable in some cases, given that if you request a refund from the tax authorities, in principle, the administration is more likely to review a self-assessment, particularly if the amount to be refunded is high than if you request compensation.
It should also be borne in mind that for most self-employed workers and companies, you can only apply for a refund in the last annual self-assessment, i.e. the fourth quarter of the year unless you are registered with the REDEME (Monthly Refund System), in which case you will have to submit the self-assessment monthly and you can also apply for a refund at the end of each month.
Annually, you must file form 390, which is an annual summary of all the 303 forms filed throughout the year, so it is essential not to make any mistakes in this so that you do not have to make any readjustments.
Some self-employed persons and companies are exempt from filing Form 390 annual summary: these are taxpayers whose activity consists of leasing urban real estate, and those who are included in the SII system (Immediate Information System).
In these cases, part of the annual summary information must be reported in Form 303 for the last period of the year (either the fourth quarter or December), although the information to be provided to the Tax Authorities in these cases is more simplified than that included in Form 390.
Who is obliged to file form 303?
Filing form 303 is compulsory for all self-employed workers and companies that carry out activities subject to VAT. The filing of the return is obligatory whatever the result of the same if you are registered for VAT with the Inland Revenue, even if there has been no activity for a quarter, in which case the self-assessment “without activity” must be filed.
In some cases, the application of the pro-rata rule must be taken into account, depending on whether the taxable person carries out more than one activity and whether any of them are exempt from VAT.
In Spain, more than 90 % of self-employed workers and companies are obliged to file form 303. In addition, those who rent premises or a flat they own when it is used as an office or workplace must also do so.
Some self-employed workers and companies are exempt from filing form 303: self-employed workers in the equivalence surcharge regime, in the simplified regime, farmers, stockbreeders and fishermen, and other professions such as medical, health or education and training services.
How and when to file form 303
To file form 303, you should be aware of the deadlines established by the AEAT (Spanish Tax Agency), which are generally as follows:
- From 1 to 20 April: invoices for the months of January, February and March.
- From 1 to 20 July: invoices for the months of April, May and June.
- From 1 to 20 October: invoices for the months of July, August and September.
- From 1 to 30 January: invoices for the months of October, November and December.
As we can see, there are four presentations of form 303 each year, corresponding to the four quarters into which it is divided. It is essential to pay attention to these deadlines, as any forgetfulness or delay is penalised with fines from the Tax Agency.
It is important to remember that we must file form 303 even if there is a quarter in which the business has no activity for whatever reason. It must be filed with a zero result, but it is necessary to avoid problems with the Tax Authorities.
In any case, as mentioned above, there is an exception to these deadlines that we have just shown and it is for the self-employed and companies that are registered in the REDEME. This is a special VAT regime with monthly refunds in which form 303 must be filed every month.
We must take into account invoices with national companies, as well as intra-Community services, imports and exports to other countries in the European Union and abroad.
How do I file form 303? To do this, all you need is your digital certificate or PIN code to identify yourself and access the online filing of the form on the Inland Revenue website, although you can also file it in person or with the help of a tax advisor.
As we can see, form 303 is one of the most important forms that any self-employed person or company should know in depth. With the exception of exempt activities, the rest of the self-employed are obliged to file it on a quarterly basis.
Now that we have helped you to find out what the 303 form is, you just have to be more careful with your invoices issued and received in order to correctly calculate the input and output VAT for your activity.
If you have any questions about this form, please contact our tax advisors in Barcelona.