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Parliamentary Group
Assembly of the Republic-Palace of S. Bento-1249-068 Lisbon-Phone: 21391 9233-Fax: 21391 7456 Email: gpcds@pp. parlamento.pt-http://cdsnoparlamento.pp. parliamento.pt
Draft Resolution No 193 /XI/1ª
The "Cash Regime" of Exigibility of VAT
Generalization of the Special Exposure Regimes to Microenterprises
Second studies of Intrum Justitia (2009), Portugal is found in 4º place, among countries
european, in the delay in payment of the invoices. The same study states that Small and
Medium-sized enterprises (SMEs) Portuguese face greater risks by the delays in the
payments roundabout, on average, 92 days beyond the agreed deadline (while the
average European is 57 days).
These late payments can have dramatic consequences for companies. When
their invoices are not paid after the scheduled date, many companies face problems
of severe liquidity, especially the SMEs, leading companies to bankruptcy.
In Portugal has been verified large number of bankruptcies of companies, mainly
between Small and Medium-Sized Enterprises (SMEs).
SMEs are the driving engine of the Portuguese economy, and second data from the Institute
National Statistical Office, relative to 2004, indicated that SMEs accounted for 99.6% of the
business fabric, generated 75.1% of employment and realized 56.8% of the turnover
national (IAPMEI, 2007). It should also be noted that it is exactly among these companies that
if it has verified the highest number of bankruptcies in Portugal. Additionally, second data
of the European Union, 1 out of every 4 bankruptcies are due to delays in payments.
The current regime of VAT exigency in Portugal worsens this situation. With the legislation
currently in force in Portugal, the taxable persons referred to in Article 2 of the Code of
VAT and non-exempt, shall be subject to payment of the tax at the time of issue of the
invoice, regardless of whether this is (or not) paid within the set deadline.
Should the invoices not be paid within the time limits, the taxable persons, and in particular the
SMEs, are affected by liquidity and solvency problems.
1-THE MOMENT OF VAT EXIGENCY
Being part of the incidence, seen this in a temporal sense, one must take into account the fact
generator of the tax and its exigency, i.e. the time when the tax is due by the
taxable and chargeable by the State.
Article 7 of the VAT Code (demand of the tax), when defining the rules of application of the
law in time, contemplates the facts that determine the birth of the tax obligation and the
its exigency, in harmony with the nature of the operations practiced, considering them
second criteria of an economic nature not always coinciding with the legal criteria
of transmission.
The tax becomes generally chargeable at the time when the operative event occurs.
even, i.e., the occurrence of the assumptions that generate the tax obligation, situation which if
checks:
-In the transmissions of goods, at the time the goods are made available to the
acquirer (n. 1, al. a) of Article 7);
-In the benefits of services, at the time of its realization (para. 1, al. (b) of Article 7);
-In imports of goods, at the time determined by the provisions applicable to the
customs duties (n ° 1, al. c) of Article 7º). In imports of goods the tax will be paid
in the customs services, in the act of customs landings (Article 27 (3)).
Article 8 (exigency of tax in the event of an obligation to issue invoice), in turn,
constitutes an exception to the general principle set out in Article 7, in which it is made coinciding
the operative fact with the exigency of the tax.
In fact, by giving a greater relevance to the invoice, the issuance of which in temporal terms constitutes
a decisive milestone for the term count on the exigency, this article makes deferred the
deadline set out in Article 7, in respect of cases where there is place for the issuance of
invoice or equivalent document.
Thus, whenever the transmission of goods or the provision of services give way to the obligation
to issue an invoice or equivalent document, pursuant to Rule 28º, the tax makes it
if chargeable:
-If the period provided for the issuance of the invoice or equivalent document is complied with, in the
moment of its issuance (Article 8 (1) al. (a)))-Pursuant to Article 35 (1), the
invoice or equivalent document should be issued no later than the fifth working day
next to the time when the tax is due under Rule 7;
-If that time limit is not complied with, at the time it ends (Article 8 (1), al. b));
-If the transmission of goods or the provision of services gives way to payment, even if
partial, previously to the issuance of invoice or equivalent document, at the time of
receipt of that payment, by the amount received, without prejudice to the previous item
(Art. 8 (1) (c)).
Pursuant to Art. 28 (1) (b), taxable persons are required to issue invoice
or equivalent document by each transmission of goods or provision of services.
With issue of invoice or equivalent document, or payment, before carried out
taxable operation, the tax exigency is anticipated in respect of the transmission or
provision of services (Article 8 (2)), by checking:
-At the time the invoice is issued, if the time limit for its issuance is complied with;
-At the time that this period ends;
-In the case of advance payment, at the time it is carried out, as it has the
n Article 8 (1).
The general rules of the exigency of VAT, set out in Articles 7º and 8 of the VAT Code and
of Articles 63 and following of the VAT Directive (2006/112/CE), they therefore report to the
moment of the realization of the operations of transmission of goods and / or provision of services and
of the corresponding invoicing, regardless of the respective payment. Thus, the VAT is
legally due and exigible by reference to these moments (yet it was not
collected / received by the supplier of the goods or provider of the services).
Article 66º of the VAT Community Directive currently establishes that the States-
Members may provide that, in relation to certain transactions or to certain categories of subjects
liabilities, the tax becomes chargeable in one of three moments, being one of them in which
the payment is received.
It is thus possible to change the date of exigency that currently exists for most of the
companies, that is, it is possible to introduce a VAT-demanding rule only in the
moment in which the same is received from the client.
On January 28, 2009, the Commission presented a proposal for a directive with a view to
amending Directive 2006 /112/CE with regard to the rules on invoicing and which
authorising also Member States to postpone the right to deduction of VAT until this
has been paid to the supplier of goods or to the service provider.
This authorisation shall apply in respect of taxable persons whose annual turnover
does not exceed a certain limit, which may be fixed by the Member States up to the amount of
€ 2,000,000, and which benefit, consequently, from an optional scheme according to which
the VAT to which they are subject to their operations only becomes chargeable when the respective
payment has been received.
While Directive 2006 /112/CE is not amended, some countries in the European Union
have applied for authorisation to the EU to apply a measure derogatory to the general principle of
demanded VAT. This authorisation may only be granted to certain categories
of taxable persons and not as a general measure applicable to all entities subject to VAT.
Are several EU countries where this scheme is in place or where rules have been created
in this scope, namely Germany, Slovenia, France, the Netherlands, Ireland, Italy
and the United Kingdom.
The Cash Regime allows that:
-The treasury bottlenecking of the PMES is alleviated and the companies lie in the
development of its business, instead of spending additional time and costs on the
getting loans or cautioned accounts, which allow them to advance to the State the
value of VAT referring to invoices that have not yet been paid;
-Companies will increase their productivity, as they have less financial burden (above
referred to) and may devote themselves exclusively to the search for new customers;
-Companies will increase their competitiveness, which promotes the possibility of increase
of sales;
-The increase in sales volume implies, in the medium-long term, an increase in revenue
tax on the part of the state, both at the VAT and IRC level.
Thus, it is intended, in the similarity of what is already happening in other European countries, that VAT
of the microenterprises can be liquidated only after receipt of the invoice value.
At present, the regime of "cash exigency" in Portugal, which allows only if
pay the VAT settled at the time the actual payment occurs on the part of the
customers of the taxable person, is applicable to the National Highway Transport Services of
Goods, to the Employees and Subcontractors of Public Works (?) and to the Deliveries of Bens to
Agricultural Cooperatives by their associates, of goods from the respective
farms.
2-THE SPECIAL REGIMES OF EXIGENCY
Special VAT Exigibility Regime of National Highway Transport Services
Goods
It was published in Journal of the Republic, on April 1, 2009, Law No. 15/2009, to which
comes to approve, in the framework of the support measures established by the Government for the sector of
road transport of goods, a special VAT exigency scheme of the
national road transport services of goods, with option of waiver, to which
produces effects since January 1, 2009.
The then-published Act sets out the possibility of the delivery of VAT to the State only to be
required at the time of payment of invoices relating to the provision of these services, since
that within the time limit for payment of invoices provided for in the legal regime of the contract of
national road transport of goods.
On the other hand, it stipulates that the deduction of VAT on the part of companies that are
recipients of the services may occur only at the time they proceed to the payment of the
same. However, the said deduction may only be made as long as the purchaser
have in your possession the voucher receipt of the payment, and must be reported in the
periodic VAT declaration relating to the tax period in which if it has been verified
receipt of the said receipt.
With respect to the requirements of supporting documentation of the said operations matters
notice that the invoices should contain the mention "VAT demanded and deductible on payment",
being mandatory for the issuance of receipts, by the amounts actually received, which
should be processed in duplicate and contain the following elements: numbering
sequential, applicable VAT rate, reference to the invoice to which you respect payment and date at
that the same is carried out.
The taxable persons (carriers) who wish to waive the scheme referred to here
from the date on which the same entered into force and for a minimum period of three years,
they should communicate their option by electronic means, to the Directorate General of Taxes, up to the
the end of the month following that of the entry into force, i.e. by the end of the month of May 2009.
Special Regime of Exigibility of VAT in the Employees and Subcontractors of Works
Public
In the terms set out by Article 1º of the Decree-Law No. 204/97 of August 9,-Regime
special of the exigency of VAT in the emplyor and underemployed of public works,
are found to be by him covered, the endeavor and underemployed of public works in
who owns the work:
-The State, which comprises the central administration and its local services (directions
school boards, regional health directorates, finance services, etc.);
-The Autonomous Regions;
-The Public Institutes created by the Decree-Law No. 237/99 of June 25 (IEP, ICOR and
ICERR), however amended by the Decree-Law No. 227/2002 of October 30, which
constituted the Institute of Highways of Portugal (IEP) by merger of ICOR-Institute for the
Road Construction and the ICERR (Institute for the Conservation and Exploration of the Network
Road), extinguishing them consequently. The IEP passed the Road of Portugal, EP by the
Decree-Law No. 239/2004 of December 21.
They are excluded from this scheme the employed and underemployed in which they are the owners of the work:
-The Local Authorities;
-The Public Companies;
-The Public Institutes (with the exception of those referred to in Decree-Law No. 237/99).
This scheme translates into the fact that VAT, concerning the services provided is not to be demanded in the
moment in which the same are performed or issued the respective invoicing but in the
moment of payment of the price.
Thus, aiming to make coinciding the timing of the tax's exigency with receipts
totals or partial, it is considered that the tax on such services is required at the moment
of the full or partial receipt of the price, by the amount received.
Notwithstanding, the tax is still chargeable when the full or partial receipt of the price
precedes the timing of taxable operations.
This scheme comes, in relation to the endeavor and underemployed of public works in which it is
owner of the work the state, enshrine the deferral of the tax exigency for the moment
of the full or partial receipt of the price, in this latter case only for the part of the price
received.
Dealing with underemployed, and without prejudice to the rule previously referred to, considers-
if the full receipt of the price, on the part of the subcontractor, takes place at the latest in the
last working day of the month following the one in which the total payment of the
undertaken by the owner of the works to the contractor.
Special VAT Exigibility Regime in the Deliveries of Bens to Agricultural Cooperatives
by their associates, from goods from their respective farms
The Law No. 85/98 of December 16-Cooperative Tax Regulations-provides for in paragraph 1 of its
Article 15 special VAT exigency regime in respect of deliveries of goods
made to the agricultural cooperatives by the associates when they are dealing with products of their
own farms.
This scheme came into force on October 1, 1999, through the Decree-Law n.
418/99, of October 21, following the legislative amendment granted by paragraph 9 of the
article 32 of Law No 87-B/98 of December 31.
For the purpose of verifying the application of this Special Exigibility Regime is necessary that
cumulatively be in question:
-Deliveries to agricultural cooperatives;
-Carried Out by its members;
-Of goods from their own holdings.
By way of derogation from the general scheme, the 'box demand' translates into the fact of the State only
be able to demand the tax from the moment the price of the delivered goods is
actually paid to the supplier. Symmetrically, the acquirer of the goods, in the frame of this
special scheme, it can only deduct the VAT invoiced by the supplier from the time in
that carry out the respective payment and on the basis of receipt issued by this. It is from this rule
that arise the specificities of this regime.
The exigency checks at the time of the full or partial receipt of the price, by the
received amount. Thus, the VAT due for the transmissions of goods occurring between the
farmers cooperators and the respective agricultural cooperatives of which they are members,
only will have to be delivered in the state coffers with reference to the tax periods
where receipts occur.
By the exposed, the Assembly of the Republic, pursuant to Article 156º (b) of the
Constitution of the Portuguese Republic, deliberating to recommend to the Government that:
1-Create a VAT "cash exigency" regime, simplified and optional, intended for the
microenterprises that do not benefit from tax exemption.
2-This regime allows these taxable persons to apply a simple rule, based on the date
of payment of your expenses upstream and from your downstream operations, to
determine the time at which they must, respectively, exercise the right to deduction of VAT and
pay the tax to the Ministry of Finance, constituting, therefore, for the said
taxable persons, a measure of simplification that may, in addition, provide them
a treasury advantage.
3-That the creation of this simplified and optional VAT scheme for microenterprises to be
subject to the following conditions:
a) VAT only becomes chargeable at the time of the actual receipt;
b) VAT only becomes deductible at the time of the actual payment;
c) they may only fall under the scheme subject to taxable persons who do not have a volume
of annual business higher than € 2,000,000 (microenterprises for the purpose of the
Decree-Law No. 372/2007 of November 6).
Palace of Saint Benedict, June 30, 2010.
The Deputies