Model 347 as a tool for the accounting closing of the fiscal year

Take advantage of the administrative burden in managing the tax model to save on taxes.

Throughout February, business owners, both individuals and legal entities, must comply with the tax obligation to provide information about transactions carried out with suppliers, creditors, and customers during the previous fiscal year that, in their annual calculation, exceeded €3,005.06 including VAT. This is the well-known form 347.

Although the information contained in relation to suppliers and creditors must only include those transactions that have been subject to deduction in our VAT returns and therefore must coincide with the records of the VAT ledger without giving rise to any doubt, the custom persists among business owners of checking the data to be declared, comparing the transactions between one and the other.

This seemingly “unnecessary” practice for tax compliance is, however, a valuable tool for detecting accounting errors and omissions. It's clear that we have our transactions with clients well under control and that there's no doubt about the existence of invoices, regardless of whether they've been paid. But we don't always have the same clarity regarding invoices received (or perhaps not received) from our suppliers.

Good treasury control, with accounting identification of each collection or payment, is a key tool to detect that we are missing any invoices to receive and claim them in time to be able to include them in our VAT returns.

Even so, if we have not been entirely rigorous in bank accounting or if we are somewhat behind in the accounting reconciliation, this cross-checking of data between suppliers and customers for the purpose of submitting form 347 to the Tax Agency will help us to verify if we have all the invoices whose expenses we can include in the year in which they accrued, proceeding to the deduction of the corresponding VAT in the year in which they are registered (always respecting the four-year period from their issuance).

 Alicia Conesa,
Tax and Accounting Area

  Àmbit Assesor

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MGI Àmbit

A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.

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