BASQUE COUNTRY AND NAVARRE: Recover the VAT from unpaid debts

When your company charges VAT, you must include it in the periodic declaration corresponding to the date on which the transaction took place, even if you have not collected it. However, if the invoice remains unpaid and you have not been able to collect the amount, the Tax Office allows you to modify the taxable base and recover the VAT paid at the time by meeting a series of requirements.

What requirements must be met?

• Having elapsed 6 months or a year from the accrual (date of delivery of the goods or provision of the service) without having received payment for all or part of the credit; one year if the previous year the turnover of your company exceeded 6, 010, 121. 04 euros.
• This circumstance must be reflected in the VAT Record Books.
• The recipient of the transaction must be a business owner or professional; or if it is an individual, the taxable base of the transaction must exceed 50 euros, excluding VAT.
• Having requested payment from the debtor through a judicial claim, notarial requirement, or by any other means that credibly proves the claim for payment from them, even in the case of credits guaranteed by Public Entities.

And then, what do you have to do to recover the VAT?

You must issue a corrective invoice and send it to the debtor canceling the VAT charged. This way, they will only owe you the principal of the transaction. This invoice must:

• Be issued within the 6 months following the expiration of the 6 months or one year indicated. And it must be sent to the customer.
• Be reported to the Tax Office within one month from the issuance.

Remember...

The correction is only made for the purpose of recovering the VAT, and does not imply a waiver of continuing to claim the principal.

If your company has unpaid debts, we will advise you on how to directly recover the uncollected VAT from the Tax Office.