BASQUE COUNTRY AND NAVARRE: Review your pro rata at the end of the year

The general pro rata allows companies to calculate the deductible VAT more easily. However, the law does not allow its use in cases where the company could be overly benefited by its application compared to the special pro rata regime. Therefore, if the deductible VAT with the general pro rata exceeds by 10% or more what would have been deducted with the special pro rata, your company must apply the latter obligatorily, already in that same fiscal year.

In any case, in the last VAT return of the year, you will have to make one of these adjustments:

✓If the 10% difference is not reached

Since during the year you have been deducting VAT provisionally according to the pro rata of the previous year, you must calculate the deductible VAT according to the definitive pro rata of the fiscal year and make the corresponding adjustment.

✓If the 10% difference is reached or exceeded

  You must switch to the special pro rata and adjust based on the deductible VAT resulting from the new calculation method.

Our professionals will calculate the definitive percentage of VAT that your company can deduct.