In January Diego issued an invoice for 2,000 € plus 420 € of VAT, paid the VAT in and by September has still not been paid. In many cases he can recover that VAT, but it is not enough to subtract it in the next Modelo 303, the VAT return: article 80 of the Spanish VAT Act requires him to wait the applicable period, claim payment, issue a corrective invoice and notify the change to Hacienda, the tax office, through Modelo 952.
Non-payment does not correct the VAT by itself
Under the general scheme, VAT becomes due when you deliver the goods or provide the service, not when you are paid. That is why an invoice for 1,210 € can oblige you to pay in 210 € even though the client has paid nothing. Non-payment does not allow you to delete the original invoice either: the transaction took place and must stay in your books.
Recovery works by reducing the taxable base. To do so, a corrective invoice is issued that cancels all or part of the base and VAT of the original. If only 600 € of base is still outstanding, that part is corrected, not the whole transaction.
| Step | General rule for a small business or professional |
|---|---|
| Waiting period | A choice of 6 months or 1 year from when the VAT became due |
| Claim | Payment must be claimed by an accepted route, keeping the proof |
| Correction | Issued within the 6 months after the end of the chosen period |
| Notification | Modelo 952 within the month after issuing the corrective invoice |
| Return | The corrected VAT is reflected in the relevant 303 |
When the clock starts
If your volume of transactions in the previous calendar year did not exceed 6,010,121.04 €, you can treat the debt as uncollectible six months or one year after the VAT became due. Choosing a period is not just about waiting: once it expires, the window for issuing the corrective invoice opens, and letting that window pass can prevent recovery by this route.
For sales with deferred payment, the count requires looking at when each unpaid instalment fell due. Under the special cash accounting scheme there are separate rules linked to the VAT falling due on 31 December of the following year. If the debtor has been declared insolvent in formal insolvency proceedings (concurso), there is also a different procedure with different deadlines. It is worth classifying the case before issuing anything.
Diego's dates, from invoice to notice
A professional under the general scheme provides a service on 10 January and issues an invoice that day for 2,000 € plus 420 € of VAT. He is not paid. If he qualifies as a small business and chooses the six-month period, he cannot correct the invoice as uncollectible the following month: he must wait until those six months have passed. After that he has the legal period to issue the corrective invoice and, from its issue, one month to file the electronic notification.
This timetable has to be set with the real dates of accrual, due date, claim and correction. A spreadsheet that just says "invoice outstanding" does not allow anyone to check that the procedure was completed in time.
You must have claimed payment
The rules require that payment has been demanded. A court claim and a demand made through a notary are the classic routes. The current rules also accept other means that reliably prove the claim, but an informal email or a phone call with no record may not be enough. Keep the content of the claim, the identification of the recipient, the date it was sent and proof of receipt.
There are restrictions when debtor and creditor are related parties, when the debt is secured or guaranteed (for the part covered), and for certain debts owed by public bodies. Nor does it apply in the same way if the client is not acting as a business or professional: in that case the base of the transaction, excluding VAT, must exceed 50 €.
Corrective invoice, Modelo 952 and Modelo 303
The corrective invoice must identify the original invoice and the reason. It is sent to the client, because the client must also correct the input VAT if they deducted it. Issuing and sending must be provable; generating a PDF and leaving it in a folder does not complete the procedure.
Next, Modelo 952, the notice of the change in taxable bases, is filed electronically. It comes with the information and documents required, including those relating to the corrective invoices and the claim. The reduction is included in the 303 for the relevant period. If the return affected has already been filed, that return is not deleted: the correction mechanism is applied in the period the law provides.
This is different from correcting a detail that was wrong from the start. For that case, see what to do with an invoice already issued. And if the return has no sales or expenses, check the difference between a nil 303 and one with a balance to carry forward.
If the client pays later
Correcting the VAT does not extinguish the civil debt: you can keep claiming the principal. If you are later paid in full or in part, the VAT treatment depends on the circumstances and may require the taxable base to be increased again. That is why the collection file, the invoicing and the record books have to stay connected.
The file that supports the recovery
The folder should let a third party follow the transaction without verbal explanations. You can send its dates through the self-employed form. Include the contract or order, the original invoice, proof of delivery, the due date, statements showing the lack of payment, the claim, the corrective invoice, proof of sending and the Modelo 952 receipt.
| Document | What it proves |
|---|---|
| Contract or acceptance | Origin and price of the debt |
| Delivery note or handover | That the transaction really happened |
| Invoice and record book | When the VAT became due, and that it was paid in |
| Reliable claim | That payment was demanded |
| Corrective invoice and proof of sending | That the change was communicated |
| Modelo 952 | Notification to the tax office |
If the client disputes that the service was provided, the problem is not only a tax one. The civil claim and the evidence of the engagement have to be assessed. Correcting the VAT does not decide who is right about the contract.
Instalments and part payments
When the price was agreed in several instalments, each unpaid instalment is analysed. A part payment reduces the outstanding debt and the base that can be changed. The VAT on the part collected is not corrected.
If Diego's invoice is payable in two instalments of 1,210 € and the client pays the first, the remaining debt contains 1,000 € of base and 210 € of VAT. The file must identify that instalment; cancelling the whole 420 € is not appropriate.
If there are several invoices and the client makes a transfer without saying which one it pays, document how the payment is allocated under the contractual and civil relationship. Choosing afterwards the invoice that suits you best for tax purposes, with no support, can be challenged.
If the debtor enters insolvency proceedings
A declaration of insolvency (concurso) opens a case separate from the ordinary uncollectible debt, with a deadline linked to the insolvency procedure. Do not automatically wait six months from the invoice if you receive formal notice of the proceedings: check straight away the publication, the notification of your claim and the deadline for changing the base.
The tax corrective invoice does not replace notifying your claim to the insolvency administrator. The two steps are related, but each has its own purpose and recipient.
Before acting, gather the invoice, the contract or order, proof of the service, bank statements, correspondence and the reliable claim. At Salama Tax we review the timetable and the documents so that a corrective invoice with the right amount does not arrive too late.