Bill would reform VAT, excise taxes and Canary Islands taxation

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1. The bill would tax telecommunications, television and electronic services in the country where the recipient lives, not where the selling company is based. This would apply from January 1, 2015.
2. It creates two optional special schemes, called the "régimen de la Unión" and "régimen exterior a la Unión", so foreign companies selling these services register in only one EU country through a one-stop portal instead of registering in each country.
3. It raises the general VAT rate on medical products from 10 to 21 percent, but keeps the reduced rate for equipment designed for the personal and exclusive use of people with impairments, such as wheelchairs, prostheses and assistive products.
4. It extends the reverse charge rule to sales of cell phones, game consoles, laptops, digital tablets, silver, platinum and palladium. Under this rule the business buyer, not the seller, declares the VAT, to make fraud harder.
5. It rewrites the special scheme for travel agencies after a European court ruling: the taxable base becomes the agency's gross margin, and agencies may apply the general scheme when the customer is a business entitled to deduct VAT.
6. It turns the Electricity Tax into a tax on the supply of electricity for consumption, with a rate of 5.11269632 percent and an 85 percent reduction of the base for electricity-intensive industries and agricultural irrigation.
7. It adjusts the tax on fluorinated greenhouse gases: it defines "final consumer" and "reseller", adds new exemptions and creates a special scheme for the polyurethane sector.
8. The planned entry into force is January 1, 2015, with exceptions: some measures from 2014, others from April or July 2014, and those on the non-customs warehousing regime from 2016.

Who it affects

• People who buy medical products or equipment for people with disabilities.: They generally pay more VAT, except for products for the personal and exclusive use of people with impairments.
• Consumers of digital, telecom and television services.: VAT is declared in the country where they live.
• Companies selling electronic, telecom or TV services online.: They can use one-stop special schemes and must file quarterly returns.
• Electricity companies and large energy-consuming industries.: New rules on when the tax is due, registration, and an 85 percent base reduction for some activities.
• Businesses buying cell phones, consoles, laptops, tablets or precious metals.: They become the ones who declare the VAT on those purchases.

Words worth knowing

Inversión del sujeto pasivo (reverse charge)

A rule under which the business buyer, not the seller, declares and pays the VAT.

Ventanilla única (one-stop shop)

A web portal where a company declares and pays VAT for all EU countries at once, without registering in each one.

Base imponible (taxable base)

The amount on which the tax is calculated.

Devengo (accrual)

The moment the obligation to pay the tax arises.

Fedatario público (public notary officer)

A person with public faith who certifies facts or acts, such as a notary.

It summarizes the text passed by the Senado. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries