Cuota repercutida: the money that passes through your account
It comes into your bank, it leaves your bank and at no point is it yours. That is the whole theory of VAT and the reason January catches so many people out.
The VAT you add to the taxable base of your invoice and charge the client, to pay over to Hacienda afterwards.
Article 88 of the VAT Act requires the tax to be passed on to the customer, and to be passed on by invoice. The customer, for their part, is obliged to bear it as long as it is passed on in accordance with the law.
Three rules that get overlooked
- The VAT is shown separately. An invoice that only says “€1,210 including VAT” lets the client deduct nothing.
- The VAT is passed on when the invoice is issued and handed over, not when it is paid.
- You lose the right to pass the tax on once a year has gone by from the date of the chargeable event (article 88.Four). If you remember too late that the VAT was missing, you pay the VAT yourself.
An example with numbers
An invoice with a taxable base of €2,000 at 21% carries €420 of cuota repercutida. The client pays €2,420, but €420 of it belongs to Hacienda from the first second.
In the quarter, with €40,000 invoiced at 21% and €15,000 of expenses at the same rate:
- Output VAT: €8,400
- Deductible input VAT: €3,150
- Payable on form 303: €5,250
That result does not depend on whether you have been paid, unless you are on the cash basis regime.
The mistake that comes up most
Looking at the bank balance to decide whether the quarter “can be paid”. The output VAT from October to December is paid over in January even if the client pays in March. The only sum that avoids the shock is setting the VAT aside the day the payment comes in.
Where this carries on in Cairos: How form 303 is worked out.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Taxable base
The total consideration for a transaction before VAT is applied to it: what you really charge for your work or your goods.
VATVAT accrued (IVA devengado)
The VAT generated by the period's transactions, regardless of whether the client has paid or not.
VATInput VAT
The VAT you pay your suppliers on purchases and expenses, deductible only if the goods or the service are used in your activity and you have the full invoice.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.