Spain: Some clarifications on the issuing of corrective invoices

A common practice among companies is to rectify invoices for a wide variety of reasons (for example, due to an erroneous issue of the original invoice) by completely cancelling the invoice initially issued. They would then issue a new invoice, with a positive sign, with the correct data.

This method is not entirely in line with Spanish invoicing regulations. In this regard, there is only an obligation to issue a corrective invoice in the cases expressly provided for in the regulation and, in principle, in no other case. These cases are, for example, cases of formal or mathematical errors in the issuing of invoices or cases of modification of the VAT taxable amount. The latter is based on Article 90 of the VAT directive (cancellation of an ineffective transaction, alteration of the price, refusal to pay the invoiced amount, partial payment etc.).

Moreover, the form in which the amending invoice must be issued is perfectly defined in the rule. The corrective invoice must be a single invoice that either directly indicates the amount of the correction, with a positive or negative sign, or it indicates the definitive amount after the correction. The practice, therefore, of crediting an invoice in full to issue a new one correctly, does not seem to be defined as such in the Spanish invoicing regulations, despite being common among companies.

In recent weeks, the Spanish tax administration has issued an opinion that may be of interest as it gives some flexibility to companies wishing to rectify invoices they have previously issued. But upon analysing the opinion in detail, it seems to have more formal implications than may first appear.

Firstly, the administration points out that the fact that the regulations settle very specific grounds for issuing corrective invoices does not prevent invoices issued previously from being corrected voluntarily for any other reason. This is providing the reason is justified and if this practice allows the corresponding verification by the tax administration to be guaranteed. In these cases of voluntary modification of a previously issued invoice, the issuing of a rectifying invoice as defined as such in Spanish invoicing regulations will not be dealt with, but rather with the issuing of an ordinary invoice.

The administration also points out that to cover this very common practice among companies, the rectification may be carried out by issuing two different invoices. One with a negative sign (credit note), even for the total amount of the invoice previously issued, and another later one that rectifies the initial invoice, which has been cancelled with the previous credit note and which contains the correct information that should have been invoiced. Given that Spanish invoicing regulations provide for the issuing of a single rectifying invoice, the credit note with a negative sign, even for the total amount of the previously issued invoice, must be considered an ordinary invoice. The second invoice, which is issued containing the data documented on the invoice after the rectification, must be considered a rectifying invoice.

While this may seem simple, it has more implications than might be thought. For example, ordinary invoices must always be numbered sequentially, and those that are corrective invoices must be issued from a different series than normal invoices. When taking invoice numbering into account, it is important that the second invoice, which, according to the Spanish administration, is considered a rectifying invoice, is the one that must be issued from a separate series. Meanwhile the first invoice, the one that fully credits the invoice initially issued, must be numbered sequentially with the previous ones, since it is an ordinary invoice, despite having a negative sign.

This has an added difficulty in the case of taxable persons who must comply with the Suministro Inmediato de Información (SII). The SII consists of sending the tax authorities information on invoices issued and received in almost real time. Corrective invoices have a complicated configuration as far as the SII is concerned. It is therefore important to take these numbering and administrative aspects into account.

As outlined, the cases in which corrective invoices can be issued, and even the way in which they are issued, are made somewhat more flexible. But this flexibility may cause additional problems in terms of numbering and forwarding the information on these invoices to the tax authorities.