On Wednesday 25 May, the Faculty of Law organised a new session of the webinar series dedicated to the current VAT situation. Ricardo Álvarez, deputy director-general of Consumer Tax of the General Revenue Directorate led the session. Meritxell Yus, partner of Cuatrecasas and Dr Salvador Durany, director of the master’s degree in Planning and Legal-Fiscal Advice (MAF) participated in the talk and the main parts of the seminar.

Álvarez focused his explanation on three topical issues: the legislative proposals of the Law 37/1992; the scope of the new directive on reduced VAT rates; and the new electronic invoicing project.

In the first part, he highlighted the change in the rules on VAT recovery in the case of bad loans and put particular stress on the draft reform law for the revision of Article 70 to ensure that VAT is neutral for employers. “Your business should not be affected by VAT: you should be able to deduct VAT without it predetermining the activity,” said the expert.

The second part of the seminar focused on the scope of the new directive on reduced VAT rates, and emphasis was placed on B2C and B2B transactions which have a new definitive regime for operations within the EU. “Environmental criteria have also been introduced, albeit timidly, since not all the desired criteria have been added,” said Álvarez. “This is an environmental commitment to subsidise renewable electricity production systems that could have as little as 0% VAT. If you have rates below 5% it could be maintained until 2032.”

Finally, with regard to the new electronic invoicing project, Álvarez explained the legislative proposal that will help companies improve their billing system by digitising it, which will result in a more efficient system and a better prevention against fraud. “With this measure we want to achieve the digitisation of small businesses and the self-employed and allow them to pass this information directly on to the tax agency if they so wish, because, although it seems strange, many of these companies do not have their accounts computerised as of yet, and this could help,” concluded the deputy director-general.