Suplido: the expense that is not yours
It is passed on to the client without VAT and without a margin, and it is not part of your taxable base. But only if four conditions are met, and failing one is enough.
An amount paid in the client's name and on their behalf, under express instructions, which is passed on to them without VAT and does not form part of your taxable base.
It is in article 78.Three.3 of the VAT Act, which excludes from the taxable base «las sumas pagadas en nombre y por cuenta del cliente, en virtud de mandato expreso del mismo» — sums paid in the client's name and on their behalf, under their express instructions.
The four requirements
- Express instructions from the client: they have asked you to pay that on their behalf. It is worth having it in writing, even if only in the engagement letter.
- The supplier's invoice is made out in the client's name, with their NIF, not in yours. This is the requirement broken most often.
- You account for the actual amount: what it cost is passed on, not a euro more.
- You do not deduct the VAT on that expense, because it is not yours.
An example with numbers
An accountancy firm pays €120 of Registro fees in its client's name and invoices them €300 of fees:
- Fees: €300 · VAT 21%: €63
- Suplido: €120 without VAT
- Total: €483
If that fee had come in the firm's name, it stops being a suplido: the base becomes €420, the VAT €88.20 and the total €508.20. Twenty-five euros and twenty cents of difference over one field on a form.
The mistake that comes up most
Calling the train ticket or the hotel you bought in your own name to go and see the client a suplido. That is your own expense: you deduct its VAT and re-invoice it with the VAT that matches your service, adding it to the base. Invoicing it “without VAT” as though it were a suplido means charging too little VAT.
Where this carries on in Cairos: Suplidos and provisiones in an accountancy firm.
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.
InvoicingAdvance on account
Money the client hands over in advance, which triggers VAT if it is on account of your work and does not if it is to pay costs in their name.
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.