New system to defer the payment of import VAT. Amongst various changes made by Law 28/2014, of 27th November we would like to point out the new payment system of the Value Added Tax on imports. This new system has been developed by Royal Decree 1073/2014 of 19th December, that has amended Value Added Tax Regulations, and its application could lead to tax savings in financial terms as it is explained below. The content of this new scheme This system enables certain taxpayers to defer the payment of the import VAT at the time of filing the corresponding returns (Form 303). Before this scheme was approved all taxpayers were obliged to pay the amount of the VAT when the tax due (Form 031) was notified by the Tax Authorities, whereas the deduction of this input VAT was deferred until the relevant return was filed. This new scheme of deferral of VAT on imports avoids financial costs due to the anticipacion of the payment of the VAT. Specifically, the taxable person who opts for this system can include both input VAT and VAT due at the monthly VAT return corresponding to the period when the Tax Authorities has notified the liquidation document. Taxable persons who can opt to this new scheme This is only applicable to taxpayers obliged to file their VAT returns on a monthly basis. Currently taxpayer obliged to file monthly VAT returns are those considered as big companies because of exceeding 6,010,121.04 EUR of turnover in previous financial year, and those that are included in the Monthly Refund Scheme. Effective date: January 1st, 2015 Requirements From a formal point of view, it is necessary to submit a census declaration, Form 036, expressly opting to apply this new VAT payment system on imports, during the month of November of the previous calendar year to the one in which shall take effect. However, in 2015, companies would be able to apply for this option during the month of January and being effective from February of the same year. Once this option is applied, it should not be renewed each year and it is understood to be extended indefinitely until explicit declination or whenever there is no need to file monthly returns. As always, the experts at Grant Thornton are at your disposal for any question, clarification or information you may require about this payment system, or any other issue you would like to consult us.