If you are self-employed, professional, or have your own business, it is very likely that you identify the tax filing period as one of those stressful moments from which you cannot escape. This is the case of the presentation of the VAT return, an indirect tax that falls on the consumer and in which, as a businessman, you only act as a “collector” for the Tax Agency. To do this, you have to fill in and present Form 303 for VAT self-assessment at the Treasury.
With more than 80 boxes, this form is, perhaps, one of the densest to fill out, but of great importance. To make your work easier, we explain what it is and how to fill it in.
What is model 303?
Model 303 is a quarterly declaration form for Value Added Tax. Companies are in charge of collecting VAT on behalf of the Treasury through consumers who buy their products or services, to later present this completed document, as well as enter the amounts collected through invoices to the Tax Agency.
When we buy or sell something, an amount is paid or entered as VAT. This tax falls on the final consumer and not on entrepreneurs or freelancers. That is why if you have your own business you can request a refund of said payment from the Treasury. The model 303 quarterly statement of the value-added tax for which you have to pay the tax agency the difference between the VAT invoices have an impact on your sales or service and you have endured in spending. And the fact is that that additional percentage that you include in your invoices in the form of VAT does not belong to you. You only act as an intermediary, since you are collecting it on behalf of the Treasury, which will later claim it from you through the presentation of form 303.
It is a form divided into eight sections and more than 80 boxes. But do not be scared, because many of them do not have to be filled in and it is easier than it seems.
Who must file the quarterly VAT return?
Form 303 must be submitted by any professional, self-employed, or entrepreneur who carries out an economic activity and operations subject to VAT, regardless of the type of entrepreneur (company, self-employed, association, cooperative, civil society …) and the result of the declaration. (to enter, to zero, refusal to compensate or return), you are obliged to present form 303 on a quarterly basis. It must also be submitted by landlords of real estate or property and real estate developers. Depending on the result of this statement, you will have to pay the Treasury or have it be the one that returns you.
By the way, as we have said, any self-employed or business is obliged to declare to the Tax Agency everything that has been billed to the consumer, even if the amount has not yet been collected. Therefore, take into account the issuance of the invoice, and, above all, the date, which is within the period on which you are reporting.
When should you file form 303?
Most of the self-employed and companies must present the VAT self-assessment quarterly (companies with a large turnover must do so monthly). For this, the Treasury establishes the following deadlines:
- First-quarter: invoices made from January to March. Deadline until April 20.
- Second-quarter: invoices made from April to June. Deadline until July 20.
- Third-quarter: invoices made from July to September. Deadline until October 20.
- Fourth-quarter: invoices made from October to December and annual summary. Deadline until January 30.
Statements made online have five days less than the settlement period.
What do you need to fill in form 303?
Before you start filling out the form, don’t forget to have at hand all the income and expenses incurred and the invoices for all of them to be able to justify them. Check that all of them are within the corresponding quarterly period.
How is Form 303 filled out?
You already know what form 303 is, who must present it, and when, so now it’s time to fill it in:
Section 1 and 2: Identification and Accrual
As its name indicates, in section 1 you only have to fill in your data and in section 2, the fiscal year and the period to which the self-assessment corresponds (first quarter 1Q, second-quarter 2Q, third-quarter 3Q or fourth quarter 4Q). They also ask you a series of questions related to your activity. Check yes or no, as appropriate.
Section 3: liquidation
It is the key section of form 303, since it is in which you are going to detail the accrued VAT (that is, the one you have collected from your customers) and, on the other, you must indicate the deductible VAT (the one you have paid to your suppliers ). However, at this point, you have to be careful, because not all expenses are deductible. Check with the Tax Agency what they are and in what percentage.
This section is divided into two sections, depending on the VAT regime you have accepted:
This is the most common application for freelancers. The result is the difference in the settlement of the VAT accrued quotas minus the sum of VAT on your expense invoices. To calculate it, you must fill in the following sections:
- Cells from 01 to 09: there are three rows and three columns. The first column corresponds to the taxable base, the second to the VAT rate you apply (4%, 10% or 21%), and the third to the amount entered by VAT. If your products or services are taxed with different types of VAT, you will use a row for each applied percentage. If you apply a single percentage, you will only have to fill in one of the rows. In addition, if you complete form 303 electronically, once you fill in the first and second fields, the calculation of the fee will be done automatically.
- Boxes 10 and 11: if you do not have an intra-community CIF, you should not fill them in. If yes, in box 10 write the tax base of intra-community acquisitions of goods and services made in the settlement period and the system will calculate the resulting fee in box 11.
- Boxes 12 and 13: in box 12 you must enter the tax bases and the fees accrued in the settlement period for the investment of the taxpayer, which are those invoices that do not include VAT but require the recipient to self-assess the operation and pass on the tax.
- Boxes 14 and 15: it may be that throughout the quarter you have issued any corrective invoices, have defaults, returns, or have made any other modification. If so, you must write it down in these boxes. Write down, with the corresponding sign (if it is a return, do not forget to put the -) the corresponding base and the result when applying the VAT.
- Boxes from 16 to 26: this is the space reserved for the equivalence surcharge. It is a special VAT regime that reflects the activity of the self-employed engaged in buying and selling. The funny thing is that this section does not apply to them, but to their suppliers. So if one or more of your clients are under this regime, you should reflect it here. In invoices with 21% VAT, the surcharge will be 5.2%. In those that have a 10% VAT, 1.4% and in those that apply 4%, 0.5%. If you make any changes to these invoices, as in the case of boxes 14 and 15, you must enter it in boxes 25 and 26.
- Box 27 : the total of the accrued installment appears, which is the sum of all the results of the installment column. The calculation is automatic if it is filled in electronically.
- Boxes 28 and 29 : for most freelancers, it will be enough to fill in these boxes in this block. You will have to calculate the tax base of all the current purchases of your business (taking into account which expenses are deductible) and the resulting VAT quota.
- Boxes 30 and 31: you must repeat the previous operation, but you will only have to fill in these boxes if you have acquired long-lived assets (for example, machinery).
- Boxes 32 to 35: in them you must indicate those extra-community purchases that go through customs and that consist of a DUA invoice, differentiating between investment and current goods.
- Boxes 36 to 39: only if you have an intra-community VAT number can you reflect in box 36 the tax base of the purchases you have made in the European Union regarding current and investment goods.
- Boxes 40 and 41: they serve you to correct data (as if it were a complementary declaration). For example, if you had forgotten to include an invoice or had declared more. Remember that if the result of the correction implies a reduction in deductions, you must enter it with a negative sign.
- Box 42: you will state the compensation you have received if you are self-employed in the special regime for agriculture, livestock, and fishing.
- Boxes 43 and 44: if before starting your activity you made any investment, such as buying machinery, technology, computers, …, you must declare the corresponding VAT quota in box 43. If it is the last quarter of the year, you must also fill in box 44.
- Box 45: collect the total amount that you can deduct.
- Box 46: is the subtraction of boxes 27 and 45 and is the result of your VAT self-assessment. If the result is positive, you must return that amount to the Treasury. If it is negative, it means that you have paid more VAT than you have charged and you can compensate it.
The simplified VAT regime applies only to the self-employed who contribute to objective estimation (modules). In fact, if in the questions in the first section of form 303 you have indicated that you work exclusively in the general regime, these sections will not be shown to you. If this is not your case and you must fill it in, you will see that in this section the modules contemplated in the order are indicated, which indicate what the VAT accrued on sales is . Next, the deductible VAT for current operations will be subtracted (not including investments) and an extra 1% of the VAT accrued will be added for expenses that are difficult to justify.
- Boxes 59 to 61: this is a merely informative section in which you must record sales abroad, which are exempt from VAT.
- Boxes 62, 63, 74, and 75 : Cash VAT is a special regime that allows the self-employed who have taken advantage of it to delay the payment of this tax until they have collected the invoices. These boxes are used to report the amount affected by the cash criterion, both in income (62 and 63) and in expenses (74 and 75).
This section reflects the final result of the declaration. If you have made the declaration electronically, you will discover that most of the boxes are filled in automatically.
If the result of box 71 is negative, you can enter the amount here for the Treasury to compensate you.
If you have not had economic activity during the entire quarter, you also have to present form 303 even if it is blank. However, you must check this box.
If you are in the last quarter of the year and the result of your settlement is negative, you can request the Treasury to refund the amount in your bank account. Check out more interesting articles at Shaz Vlog.
In this section, inform the account number in which you want the Treasury to collect VAT.
This section is intended for those who are submitting a supplementary declaration. If this is your case, you must include proof of the self-assessment of the return that you are going to supplement.