Invoicing for clinics and healthcare practices
Healthcare is exempt from VAT, but aesthetic treatment is not, and neither is an expert report. As soon as the two live side by side the prorrata appears, and that is where a small practice starts deducting the VAT on everything else wrongly.
What is particular about invoicing in clinics and practices
No other sector on this site has an exemption as broad, or a consequence as tangled as the one it brings.
Healthcare is exempt
Article 20.Uno.3º of the VAT Act exempts care given to natural persons by medical or healthcare professionals — including qualified psychologists, speech therapists and opticians — whoever pays for it. What marks out the exemption is not the recipient but the purpose: preventing, diagnosing or treating illness. Your invoice to the patient goes without VAT, and that is not an option: it is an exemption.
But not everything you do is
Aesthetic medicine with no therapeutic purpose, expert reports, certificates for evidential purposes and product sales do carry VAT. And watch out for the easy argument: they are not taxable «because an insurer pays for them», but because they do not seek to prevent, diagnose or treat. Living with exempt and taxable transactions at once is the norm in a clinic, not the exception.
And that means prorrata
You do not deduct all the VAT on your expenses: only a percentage. During the year you apply the previous year's final percentage, and in the last return of the year you work out the final one with your real income and adjust it all at once. The result is always rounded up. It is the calculation most often got wrong in a practice.
Health data, a special category
A patient's name tied to a treatment is health data, with the reinforced protection of the European Regulation. In an invoicing program the prudent thing is not to put more than necessary in the invoice item.
How it is done today, and how it looks with Cairos
In a practice the mess is not in the invoicing: it is in the VAT you have not deducted properly.
Without Cairos
- Everything is invoiced the same way, without separating the exempt from the taxable.
- Nobody has heard of the prorrata until an inspection turns up.
- The VAT on the electricity, the rent and the materials is deducted in full.
- The invoice items describe the treatment in more detail than is necessary.
- The insurers pay at their own pace and nobody keeps track.
With Cairos
- Each service is marked as exempt or taxable from its own record.
- During the year the previous year's final prorrata is applied, which is what the law requires.
- In the last return of the year the final one is worked out and adjusted.
- The item on the invoice says just enough and the clinical detail stays out.
- Due dates by insurer and by patient are in plain sight.
What is exempt and what is not
The exemption covers care given to natural persons with the purpose of prevention, diagnosis or treatment. Anything that does not fit there carries VAT.
| Service | VAT | Why |
|---|---|---|
| Medical consultation, physiotherapy, psychology | Exempt | Healthcare under art. 20.Uno.3º, given by a professional with a recognised qualification. |
| Dentistry and dental prostheses | Exempt | It also has an exemption of its own, in art. 20.Uno.5º, which covers the supply and fitting of the prosthesis as well. |
| Rehabilitation after an injury | Exempt | It has a therapeutic purpose. |
| Aesthetic medicine with no therapeutic purpose | 21 % | There is no prevention, diagnosis or treatment of an illness. |
| An expert report or a certificate for evidential purposes | 21 % | What takes it out of the exemption is the purpose, not who pays for it: the law says «cualquiera que sea la persona destinataria», whoever the recipient is. |
| Sale of cosmetics and over-the-counter product | 21 % | It is a supply of goods, and no list in art. 91 covers it. |
| Medical products on the list in the Act's eighth annex | 10 % | Art. 91.Uno.1.6º.c: medical equipment and apparatus designed to relieve or treat impairments, with its closed list. It is worth looking at it before invoicing at 21%. |
| Medicines for human use, prostheses and orthoses for people with disabilities | 4 % | Art. 91.Dos.1.3º and 5º. Disability is evidenced with a degree of 33% or more. |
| Renting a consulting room to another professional | 21 % | It is a lease of business premises, outside the exemption in art. 20.Uno.23º. |
| Teaching given by the healthcare professional | Exempt or taxable | It goes under the education exemption, which is a different one and has its own requirements. |
The exemption is set by the purpose of the service and the qualification of whoever provides it, not by the sign on the door or by who signs the cheque. And a clinic with aesthetic treatments or product sales is, almost certainly, on prorrata.
The modelos you end up filing
| Form | When | Why in your case |
|---|---|---|
| 303 | Quarterly | Only for the taxable part, and with the prorrata applied to the input VAT. |
| 390 | January | The annual summary, with the final prorrata. |
| 130 | Quarterly | If you are an autónomo and less than 70% of your income carries withholding. |
| 111 | Quarterly | Withholdings for staff and for other professionals. |
| 115 | Quarterly | The withholding on the rent for the practice. |
What you will actually use
Just what a practice needs, with no warehouse or manufacturing screens.
Exempt and taxable kept apart
Each service with its own treatment, and the 303 with the share that belongs to it.
Prorrata
Worked out from your income and adjusted in the fourth quarter.
Session passes
The pass is invoiced the day it is paid for, which is when the VAT becomes chargeable. How many sessions are left is not something Cairos counts: that stays in your diary.
Insurers and patients
Separate due dates, with a warning about anything outstanding for too long.
Try it with your practice's invoices
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Questions from clinics and practices
Your practice invoices differently. So does the program.
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