Everything you need to know about 303 form for VAT returns
PYMES Y NEGOCIOS I May 11, 2021
If you are self-employed, a professional worker or own your own business, you likely see the tax return submission period as one of those stressful but unavoidable moments in your work life. This includes submitting your VAT return. VAT is an indirect tax paid by consumers. As a businessowner, you only "collect" this tax for the Spanish tax authority. To this end, you need to fill in and submit form 303 for VAT self-assessment to the tax authority.
Consisting of more than 80 boxes for you to fill in, this form is perhaps one the densest to complete but it is of great importance. To make this easier for you, we explain what the form is and how to complete it.
Form 303 is a quarterly Value-Added Tax return form. Companies must collect VAT on behalf of the tax authority from the buyers of their products or services. Afterwards, they must fill in and file this document and report the invoiced amounts to the tax authority.
When you buy or sell something, you pay or receive a specific amount for VAT purposes. This tax is applied to end consumers and not businessowners or self-employed workers. For this reason, if you own your own business, you can ask the tax authority to refund you for this payment. Submitting form 303 for quarterly Valued-Added Tax returns will result in you paying the tax authority the difference between the VAT you have included in your sales/services invoices and the VAT you have paid with your expenses. This happens because the additional percentage you include in your invoices as VAT does not belong to you. You are simply the intermediary since you are collecting VAT on behalf of the tax authority. The tax authority will subsequently demand this amount from you by submitting form 303.
This form is divided into eight sections and more than 80 boxes for you to fill in. But don't worry: a lot of them don't need to be filled in and it's simpler than it looks.
Form 303 must be submitted by any professional, self-employed worker or businessowner who engages in economic activities and operations subject to VAT, irrespective of the type of businessowner they are (company, self-employed, association, cooperative, civil society, etc.) and of the return's result (payable, zero, negative for offsetting or refund). They must all submit form 303 every quarter. This also applies to anyone renting a property or asset and to property developers. Depending on the result of your return, you will either have to pay a given amount to the tax authority or receive an excess from the tax authority.
By the way, as we mentioned above, all self-employed workers or businesses must declare any invoiced tax to the tax authority, even if they have not effectively collected the VAT amount yet. As a consequence, bear in mind that the invoice, particularly its date, must be issued within the period you are submitting the return for.
Most self-employed workers and companies must submit their VAT self-assessment return every quarter (companies with a lot of invoices must do this every month). The tax authority has set the following submission deadlines:
Deadlines for online submissions are shorter by five days.
Before you start completing the form, make sure you have a record of all your incomings and outgoings on hand, as well as the respective invoices as proof. Make sure the invoices refer to the right quarter.
Now that you know what form 303 is, who must submit it and when, it's time to complete it:
In section 1, you only need to enter your personal details. In section 2, you need to enter the tax year and period for self-assessment (first quarter, 1T; second quarter, 2T; third quarter, 3T; or fourth quarter, 4T). You are also asked a series of questions about your activity and operations. Choose yes or no, as applicable.
The key section in form 303 since this is where you will enter the VAT you have accrued (i.e. collected from your customers), as well as the VAT you have paid to your suppliers. At this point, you need to pay attention since not all expenses can be declared against VAT. Check the tax authority's website for these expenses and their percentage.
This section is divided into two subsections depending on the type of VAT you have selected:
The VAT scheme most often used by self-employed workers. The result is the difference between the settlement of accrued VAT payments minus the total VAT for your expense invoices. To calculate it, you must fill in the following sections:
Simplified VAT only applies to self-employed workers who pay taxes based on estimated profits (modules), "estimación objetiva". In fact, if you have stated in the first section of form 303 that you only apply the general VAT scheme, these sections are not shown. If not and you must fill in these sections, you can see the applicable modules indicating the VAT accrued from sales. From this, the system subtracts the VAT that can be deducted for current expenses (not including investments) and adds 1% of the VAT accrued from hard-to-justify expenses.
This section shows your return's final result. If you have completed the form online, most of the boxes are filled in automatically.
If box 71 shows a negative result, you can enter the amount here to ask the tax authority to offset it against subsequent returns.
If you did not engage in any activity during the quarter, you still need to file form 303 albeit blank. This box must be ticked though.
If this is the last quarter of the year and your self-assessment result is negative, you can ask the tax authority to refund the amount to your bank account.
Enter the account number to pay your VAT.
Section for taxpayers who have file a supplementary return. In this case, you must add proof of self-assessment for the return you will be filing.
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