A rapidly growing concern
The 2018 Junta accounts show a figure for Unrecoverable IVA of around €14,000 but what exactly is Unrecoverable IVA and why would it be showing as a cost to the Junta?
IVA (Impuestos sobre el Valor Añadido) is simply Spanish VAT. The rates of IVA or VAT vary across Europe but the tax works the same way everywhere in the EU. In Spain the standard rate applied is 21%.
Any registered business or organisation must charge VAT on goods or services invoiced, but can also recover VAT charged to it in the course of its normal business activity. This recoverable VAT reduces the total of VAT payable to government. But what is unrecoverable VAT?
This is how the EUbusiness website explains it.
What is Non-Recoverable VAT?
When your purchase or expenses are related to 'non-commercial' activities, no VAT is eligible to be reclaimed. Examples of this could include business conducted which is partially or wholly unrelated to clients, state-sponsored or government-funded business (although this again is subject to a myriad of terms and conditions, and is best worth checking), and any non-official business
In order to create a cost of €14k unrecoverable IVA in the 2018 accounts, there must have been an expenditure of around €67k that could relate to 'non-commercial' activities. We do not yet know how much unrecoverable IVA will show in the 2019 accounts but we do know that the 2020 Forecast contained a forecast unrecoverable IVA figure of €57k.
To generate €57k of IVA would require €271k of as yet unexplained expenditure. This is not exactly a small amount!
The unrecoverable IVA figures are a significant cost to owners, so it is important to get some transparency on the Junta costs that are generating these large unrecoverable amounts. A full breakdown of the spends that are generating these costs must therefore be provided.
The 2018 Junta accounts show a figure for Unrecoverable IVA of around €14,000 but what exactly is Unrecoverable IVA and why would it be showing as a cost to the Junta?
IVA (Impuestos sobre el Valor Añadido) is simply Spanish VAT. The rates of IVA or VAT vary across Europe but the tax works the same way everywhere in the EU. In Spain the standard rate applied is 21%.
Any registered business or organisation must charge VAT on goods or services invoiced, but can also recover VAT charged to it in the course of its normal business activity. This recoverable VAT reduces the total of VAT payable to government. But what is unrecoverable VAT?
This is how the EUbusiness website explains it.
What is Non-Recoverable VAT?
When your purchase or expenses are related to 'non-commercial' activities, no VAT is eligible to be reclaimed. Examples of this could include business conducted which is partially or wholly unrelated to clients, state-sponsored or government-funded business (although this again is subject to a myriad of terms and conditions, and is best worth checking), and any non-official business
In order to create a cost of €14k unrecoverable IVA in the 2018 accounts, there must have been an expenditure of around €67k that could relate to 'non-commercial' activities. We do not yet know how much unrecoverable IVA will show in the 2019 accounts but we do know that the 2020 Forecast contained a forecast unrecoverable IVA figure of €57k.
To generate €57k of IVA would require €271k of as yet unexplained expenditure. This is not exactly a small amount!
The unrecoverable IVA figures are a significant cost to owners, so it is important to get some transparency on the Junta costs that are generating these large unrecoverable amounts. A full breakdown of the spends that are generating these costs must therefore be provided.