We are about to close the 2015 fiscal year and it is important to remember the consequences that the turnover or volume of operations of the past year may have on our company.
Below we outline the different thresholds to be taken into account from 1 January 2016
LARGE COMPANY.
A company is considered a large company when its volume of operations has exceeded 6,010,121.04 euros.
The concept of turnover can be found in Article 121 of the VAT Law, which defines it as the total amount, excluding VAT itself and, where applicable, the equivalence surcharge and the lump-sum compensation, of the supplies of goods and services carried out by the taxable person during the previous calendar year, including those exempt from the tax. Transactions are considered to have taken place when the VAT accrues.
The following are not considered when determining the volume of operations:
- 1. Occasional deliveries of real estate.
- 2. Deliveries of goods classified as investment goods with respect to the transferor.
- 3. Certain financial transactions, including those that are not exempt and exempt transactions relating to investment gold, when both are not part of the taxable person's business or professional activity.
The consequence of being considered a Large Company affects the frequency of VAT returns, withholdings on account of Personal Income Tax, Corporate Income Tax or Non-Resident Income Tax, etc., which will become monthly.
Likewise, the classification of the company as a Large Company will affect the method of calculating the installment payments of Corporate Income Tax , which will be carried out compulsorily by the method of art. 45.3 of the Consolidated Text of the Corporate Income Tax Law
SMALL COMPANY.
A small business is defined as one whose net turnover in the immediately preceding tax period is less than 10 million euros, regardless of the turnover volume of the tax period itself.
The Corporate Income Tax Law does not define what is meant by "turnover". However, given that the rules of common law have a supplementary character in the fiscal field, we can turn to commercial regulations, specifically the General Accounting Plan, according to which the net amount of turnover is determined by deducting from the amount of sales of products and the provision of services or other income corresponding to the ordinary activities of the company, the amount of any discount (bonuses and other reductions on sales) and the VAT and other taxes directly related to them, which must be passed on.
When an entity is part of a group of companies within the meaning of Article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, the net amount of turnover will refer to the set of entities belonging to said group.
The Corporate Income Tax Law regulates a special tax regime for small businesses, through the granting of different tax incentives at the level of taxable base and tax rate that have in common the reduction of the effective taxation of these companies.
Thus, considering the above definitions, do not be surprised if you conclude that your company may be considered both a Large Company and a Small Company simultaneously if its turnover or business volume has been in the range between 6,010,121.04 euros and 10,000,000 euros.
Other thresholds to consider will also affect the frequency of filing certain information returns or even the payment of the IAE (Economic Activities Tax). Namely:
PERIODICITY 349
The reporting periods depend on the quantitative limit of 50,000.00 euros of the accumulated amount of intra-community supplies of goods and services
Declaration periods and filing deadlinesare as follows:
1. Monthly : The declaration period generally includes the operations carried out in each calendar month, and is submitted during the first 20 calendar days of the month immediately following the corresponding monthly period, except for the month of July, which can be submitted during the month of August and the first 20 calendar days of September.
2. Bimonthly: If at the end of the second month of a calendar quarter the total accumulated amount of intra-community supplies of goods and services that must be included in the recapitulative statement exceeds 50,000 euros, excluding VAT.
In this case, the summary statement will be submitted during the first 20 calendar days immediately following the corresponding two-month period.
3. Quarterly: When neither during the reference quarter (current quarter) nor in each of the four previous calendar quarters does the total accumulated amount of intra-community supplies of goods and services that must be included in the recapitulative statement exceed 50,000 euros, excluding VAT.
In this case, the summary statement will be submitted during the first 20 calendar days of the month immediately following the corresponding quarterly period.
INTRASTAT
Those responsible for providing information who, during the calendar year prior to the reference period, carried out intra-Community dispatches or imports with a statistical value below the "exemption threshold" (€250,000 for 2014) are exempt from the obligation to submit the INTRASTAT declaration for dispatches or imports of goods . However , these responsible parties will be required to submit the aforementioned declaration from the reference period onwards in which they exceed the "exemption threshold".
IAE PAYMENT
They are exempt from the tax provided that the net amount of their turnover is less than 1,000,000 euros, regardless of the nature of the activities they carry out, the taxpayers of the IS, civil companies and the entities of the LGT art.35.4 as well as the taxpayers for the IRNR who operate in Spain through a permanent establishment.
In another area of obligations, specifically regarding the preparation and presentation of Annual Accounts for filing with the Commercial Registry, there are also limits based on turnover (among other factors) that allow or do not allow the preparation of accounts in Abbreviated format and therefore exempt them from the obligation to be audited
ABBREVIATED STATEMENT OF ACCOUNTS (NO AUDIT)
The use of simplified models is acceptable for small companies. More specifically, if the following conditions:
a) Companies that meet at least two of the following circumstances at the closing date of each of the following financial years for two consecutive years may prepare abbreviated balance sheets , statements of changes in equity and notes (LSC art.257 and 261):
– that the total value of the assets does not exceed 2,850,000 euros. For these purposes, total assets shall be understood to be the total shown in the balance sheet model;
– that the net amount of its annual turnover does not exceed 5,700,000.00 euros; and
– that the average number of workers employed during the year does not exceed 50.
However, with effect from 29-9-13, the LSC art.257.1 redacc L 14/2013 art.49.1, on support for entrepreneurs and their internationalization, establishes that companies that, for two consecutive financial years, meet at least two of the following circumstances at the closing date of each of them, may prepare abbreviated balance sheets and statements of changes in equity:
– that the total value of the assets does not exceed four million euros;
– that the net amount of its annual turnover does not exceed 8,000,000.00 euros;
– that the average number of workers employed during the year does not exceed fifty.
When a balance sheet, statement of changes in equity and notes to the financial statements can be prepared in abbreviated format, the statement of cash flows will not be mandatory.
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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