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The "box" Of Chargeability Of Vat Generalisation Of Special Regime Due To Micro-Enterprises.

Original Language Title: O "Regime de Caixa" de exigibilidade do IVA generalização dos regime especiais de exigibilidade às microempresas.

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Parliamentary Group

Assembly of the Republic-Palace of S. Bento-1249-068 Lisbon-Phone: 21391 9233-Fax: 21391 7456 Email: gpcds@pp.

Draft Resolution No 193 /XI/1ª

The "Cash Regime" of Exigibility of VAT

Generalization of the Special Exposure Regimes to Microenterprises

Second studies of Intrum Justitia (2009), Portugal is found in 4º place, among countries

european, in the delay in payment of the invoices. The same study states that Small and

Medium-sized enterprises (SMEs) Portuguese face greater risks by the delays in the

payments roundabout, on average, 92 days beyond the agreed deadline (while the

average European is 57 days).

These late payments can have dramatic consequences for companies. When

their invoices are not paid after the scheduled date, many companies face problems

of severe liquidity, especially the SMEs, leading companies to bankruptcy.

In Portugal has been verified large number of bankruptcies of companies, mainly

between Small and Medium-Sized Enterprises (SMEs).

SMEs are the driving engine of the Portuguese economy, and second data from the Institute

National Statistical Office, relative to 2004, indicated that SMEs accounted for 99.6% of the

business fabric, generated 75.1% of employment and realized 56.8% of the turnover

national (IAPMEI, 2007). It should also be noted that it is exactly among these companies that

if it has verified the highest number of bankruptcies in Portugal. Additionally, second data

of the European Union, 1 out of every 4 bankruptcies are due to delays in payments.

The current regime of VAT exigency in Portugal worsens this situation. With the legislation

currently in force in Portugal, the taxable persons referred to in Article 2 of the Code of

VAT and non-exempt, shall be subject to payment of the tax at the time of issue of the

invoice, regardless of whether this is (or not) paid within the set deadline.

Should the invoices not be paid within the time limits, the taxable persons, and in particular the

SMEs, are affected by liquidity and solvency problems.


Being part of the incidence, seen this in a temporal sense, one must take into account the fact

generator of the tax and its exigency, i.e. the time when the tax is due by the

taxable and chargeable by the State.

Article 7 of the VAT Code (demand of the tax), when defining the rules of application of the

law in time, contemplates the facts that determine the birth of the tax obligation and the

its exigency, in harmony with the nature of the operations practiced, considering them

second criteria of an economic nature not always coinciding with the legal criteria

of transmission.

The tax becomes generally chargeable at the time when the operative event occurs.

even, i.e., the occurrence of the assumptions that generate the tax obligation, situation which if


-In the transmissions of goods, at the time the goods are made available to the

acquirer (n. 1, al. a) of Article 7);

-In the benefits of services, at the time of its realization (para. 1, al. (b) of Article 7);

-In imports of goods, at the time determined by the provisions applicable to the

customs duties (n ° 1, al. c) of Article 7º). In imports of goods the tax will be paid

in the customs services, in the act of customs landings (Article 27 (3)).

Article 8 (exigency of tax in the event of an obligation to issue invoice), in turn,

constitutes an exception to the general principle set out in Article 7, in which it is made coinciding

the operative fact with the exigency of the tax.

In fact, by giving a greater relevance to the invoice, the issuance of which in temporal terms constitutes

a decisive milestone for the term count on the exigency, this article makes deferred the

deadline set out in Article 7, in respect of cases where there is place for the issuance of

invoice or equivalent document.

Thus, whenever the transmission of goods or the provision of services give way to the obligation

to issue an invoice or equivalent document, pursuant to Rule 28º, the tax makes it

if chargeable:

-If the period provided for the issuance of the invoice or equivalent document is complied with, in the

moment of its issuance (Article 8 (1) al. (a)))-Pursuant to Article 35 (1), the

invoice or equivalent document should be issued no later than the fifth working day

next to the time when the tax is due under Rule 7;

-If that time limit is not complied with, at the time it ends (Article 8 (1), al. b));

-If the transmission of goods or the provision of services gives way to payment, even if

partial, previously to the issuance of invoice or equivalent document, at the time of

receipt of that payment, by the amount received, without prejudice to the previous item

(Art. 8 (1) (c)).

Pursuant to Art. 28 (1) (b), taxable persons are required to issue invoice

or equivalent document by each transmission of goods or provision of services.

With issue of invoice or equivalent document, or payment, before carried out

taxable operation, the tax exigency is anticipated in respect of the transmission or

provision of services (Article 8 (2)), by checking:

-At the time the invoice is issued, if the time limit for its issuance is complied with;

-At the time that this period ends;

-In the case of advance payment, at the time it is carried out, as it has the

n Article 8 (1).

The general rules of the exigency of VAT, set out in Articles 7º and 8 of the VAT Code and

of Articles 63 and following of the VAT Directive (2006/112/CE), they therefore report to the

moment of the realization of the operations of transmission of goods and / or provision of services and

of the corresponding invoicing, regardless of the respective payment. Thus, the VAT is

legally due and exigible by reference to these moments (yet it was not

collected / received by the supplier of the goods or provider of the services).

Article 66º of the VAT Community Directive currently establishes that the States-

Members may provide that, in relation to certain transactions or to certain categories of subjects

liabilities, the tax becomes chargeable in one of three moments, being one of them in which

the payment is received.

It is thus possible to change the date of exigency that currently exists for most of the

companies, that is, it is possible to introduce a VAT-demanding rule only in the

moment in which the same is received from the client.

On January 28, 2009, the Commission presented a proposal for a directive with a view to

amending Directive 2006 /112/CE with regard to the rules on invoicing and which

authorising also Member States to postpone the right to deduction of VAT until this

has been paid to the supplier of goods or to the service provider.

This authorisation shall apply in respect of taxable persons whose annual turnover

does not exceed a certain limit, which may be fixed by the Member States up to the amount of

€ 2,000,000, and which benefit, consequently, from an optional scheme according to which

the VAT to which they are subject to their operations only becomes chargeable when the respective

payment has been received.

While Directive 2006 /112/CE is not amended, some countries in the European Union

have applied for authorisation to the EU to apply a measure derogatory to the general principle of

demanded VAT. This authorisation may only be granted to certain categories

of taxable persons and not as a general measure applicable to all entities subject to VAT.

Are several EU countries where this scheme is in place or where rules have been created

in this scope, namely Germany, Slovenia, France, the Netherlands, Ireland, Italy

and the United Kingdom.

The Cash Regime allows that:

-The treasury bottlenecking of the PMES is alleviated and the companies lie in the

development of its business, instead of spending additional time and costs on the

getting loans or cautioned accounts, which allow them to advance to the State the

value of VAT referring to invoices that have not yet been paid;

-Companies will increase their productivity, as they have less financial burden (above

referred to) and may devote themselves exclusively to the search for new customers;

-Companies will increase their competitiveness, which promotes the possibility of increase

of sales;

-The increase in sales volume implies, in the medium-long term, an increase in revenue

tax on the part of the state, both at the VAT and IRC level.

Thus, it is intended, in the similarity of what is already happening in other European countries, that VAT

of the microenterprises can be liquidated only after receipt of the invoice value.

At present, the regime of "cash exigency" in Portugal, which allows only if

pay the VAT settled at the time the actual payment occurs on the part of the

customers of the taxable person, is applicable to the National Highway Transport Services of

Goods, to the Employees and Subcontractors of Public Works (?) and to the Deliveries of Bens to

Agricultural Cooperatives by their associates, of goods from the respective



Special VAT Exigibility Regime of National Highway Transport Services


It was published in Journal of the Republic, on April 1, 2009, Law No. 15/2009, to which

comes to approve, in the framework of the support measures established by the Government for the sector of

road transport of goods, a special VAT exigency scheme of the

national road transport services of goods, with option of waiver, to which

produces effects since January 1, 2009.

The then-published Act sets out the possibility of the delivery of VAT to the State only to be

required at the time of payment of invoices relating to the provision of these services, since

that within the time limit for payment of invoices provided for in the legal regime of the contract of

national road transport of goods.

On the other hand, it stipulates that the deduction of VAT on the part of companies that are

recipients of the services may occur only at the time they proceed to the payment of the

same. However, the said deduction may only be made as long as the purchaser

have in your possession the voucher receipt of the payment, and must be reported in the

periodic VAT declaration relating to the tax period in which if it has been verified

receipt of the said receipt.

With respect to the requirements of supporting documentation of the said operations matters

notice that the invoices should contain the mention "VAT demanded and deductible on payment",

being mandatory for the issuance of receipts, by the amounts actually received, which

should be processed in duplicate and contain the following elements: numbering

sequential, applicable VAT rate, reference to the invoice to which you respect payment and date at

that the same is carried out.

The taxable persons (carriers) who wish to waive the scheme referred to here

from the date on which the same entered into force and for a minimum period of three years,

they should communicate their option by electronic means, to the Directorate General of Taxes, up to the

the end of the month following that of the entry into force, i.e. by the end of the month of May 2009.

Special Regime of Exigibility of VAT in the Employees and Subcontractors of Works


In the terms set out by Article 1º of the Decree-Law No. 204/97 of August 9,-Regime

special of the exigency of VAT in the emplyor and underemployed of public works,

are found to be by him covered, the endeavor and underemployed of public works in

who owns the work:

-The State, which comprises the central administration and its local services (directions

school boards, regional health directorates, finance services, etc.);

-The Autonomous Regions;

-The Public Institutes created by the Decree-Law No. 237/99 of June 25 (IEP, ICOR and

ICERR), however amended by the Decree-Law No. 227/2002 of October 30, which

constituted the Institute of Highways of Portugal (IEP) by merger of ICOR-Institute for the

Road Construction and the ICERR (Institute for the Conservation and Exploration of the Network

Road), extinguishing them consequently. The IEP passed the Road of Portugal, EP by the

Decree-Law No. 239/2004 of December 21.

They are excluded from this scheme the employed and underemployed in which they are the owners of the work:

-The Local Authorities;

-The Public Companies;

-The Public Institutes (with the exception of those referred to in Decree-Law No. 237/99).

This scheme translates into the fact that VAT, concerning the services provided is not to be demanded in the

moment in which the same are performed or issued the respective invoicing but in the

moment of payment of the price.

Thus, aiming to make coinciding the timing of the tax's exigency with receipts

totals or partial, it is considered that the tax on such services is required at the moment

of the full or partial receipt of the price, by the amount received.

Notwithstanding, the tax is still chargeable when the full or partial receipt of the price

precedes the timing of taxable operations.

This scheme comes, in relation to the endeavor and underemployed of public works in which it is

owner of the work the state, enshrine the deferral of the tax exigency for the moment

of the full or partial receipt of the price, in this latter case only for the part of the price


Dealing with underemployed, and without prejudice to the rule previously referred to, considers-

if the full receipt of the price, on the part of the subcontractor, takes place at the latest in the

last working day of the month following the one in which the total payment of the

undertaken by the owner of the works to the contractor.

Special VAT Exigibility Regime in the Deliveries of Bens to Agricultural Cooperatives

by their associates, from goods from their respective farms

The Law No. 85/98 of December 16-Cooperative Tax Regulations-provides for in paragraph 1 of its

Article 15 special VAT exigency regime in respect of deliveries of goods

made to the agricultural cooperatives by the associates when they are dealing with products of their

own farms.

This scheme came into force on October 1, 1999, through the Decree-Law n.

418/99, of October 21, following the legislative amendment granted by paragraph 9 of the

article 32 of Law No 87-B/98 of December 31.

For the purpose of verifying the application of this Special Exigibility Regime is necessary that

cumulatively be in question:

-Deliveries to agricultural cooperatives;

-Carried Out by its members;

-Of goods from their own holdings.

By way of derogation from the general scheme, the 'box demand' translates into the fact of the State only

be able to demand the tax from the moment the price of the delivered goods is

actually paid to the supplier. Symmetrically, the acquirer of the goods, in the frame of this

special scheme, it can only deduct the VAT invoiced by the supplier from the time in

that carry out the respective payment and on the basis of receipt issued by this. It is from this rule

that arise the specificities of this regime.

The exigency checks at the time of the full or partial receipt of the price, by the

received amount. Thus, the VAT due for the transmissions of goods occurring between the

farmers cooperators and the respective agricultural cooperatives of which they are members,

only will have to be delivered in the state coffers with reference to the tax periods

where receipts occur.

By the exposed, the Assembly of the Republic, pursuant to Article 156º (b) of the

Constitution of the Portuguese Republic, deliberating to recommend to the Government that:

1-Create a VAT "cash exigency" regime, simplified and optional, intended for the

microenterprises that do not benefit from tax exemption.

2-This regime allows these taxable persons to apply a simple rule, based on the date

of payment of your expenses upstream and from your downstream operations, to

determine the time at which they must, respectively, exercise the right to deduction of VAT and

pay the tax to the Ministry of Finance, constituting, therefore, for the said

taxable persons, a measure of simplification that may, in addition, provide them

a treasury advantage.

3-That the creation of this simplified and optional VAT scheme for microenterprises to be

subject to the following conditions:

a) VAT only becomes chargeable at the time of the actual receipt;

b) VAT only becomes deductible at the time of the actual payment;

c) they may only fall under the scheme subject to taxable persons who do not have a volume

of annual business higher than € 2,000,000 (microenterprises for the purpose of the

Decree-Law No. 372/2007 of November 6).

Palace of Saint Benedict, June 30, 2010.

The Deputies