VAT voucher, tax benefit or taxpayer control?

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The State Budget proposal for 2021, within the scope of consumption taxes, more precisely in the area of ​​Value Added Tax, provides for a program to support and stimulate consumption in the accommodation, culture and restaurant sectors, which has been called "IVAucher". Are we faced with yet another way for taxpayers to control each other? Or, in this particular case, for economic agents to be controlled by end consumers?

The objective of this program is to support sectors of the Portuguese economy that have been severely affected by the pandemic caused by COVID-19, namely the accommodation, culture and restaurant sectors.

How will the VAT Voucher work?
This stimulus will be based on a mechanism that allows the final consumer to accumulate the amount corresponding to the total VAT paid on consumption in the identified sectors during a quarter and use this amount during the following quarter on consumption in those same sectors.

The calculation, or rather, the determination of the amount jordan whatsapp number database to the VAT paid by end consumers will be made based on the amounts shown on the invoices communicated to the Tax Authority (AT). At this point, nothing is clarified when the trader fails to comply with his obligation to communicate the invoices issued, assuming that it is the end consumers who communicate the invoices using the QR Code technology that will come into force on January 1, 2021.

The accumulated amount will be used through an immediate discount on consumption, which takes the form of a contribution and operates through interbank clearing, through the entities responsible for processing electronic payments that ensure the technical services of the interbank clearing system (SICOI) of the Bank of Portugal, within the scope of processing transactions with bank cards.

For those who are not familiar with SICOI, it is a retail payments system managed by the Bank of Portugal. This system processes and clears retail payments made by cheque, commercial bill, direct debit, credit transfer, instant transfer and bank cards.

For this reason, it is thought that this support can only work through the use of bank cards.

In practice, the end consumer who consumed restaurant, accommodation or cultural services in a given quarter will pay less for the same services in the following quarter.

VAT Voucher vs Personal Data Protection Regime

By subscribing to this tax benefit, end consumers will freely, in an informed and explicit manner consent to the processing and communication of data necessary for its operation.

The AT, for its part, will not be able to access, directly or indirectly, any banking data within the scope of the "IVAucher" program, with the exception of the processing strictly necessary to present to the consumer the movements and balances relating to the use of the benefit on the AT channels, although this processing ensures that such data is not stored by the AT nor is it accessible.

At the same time, the entities involved and responsible for processing electronic payments cannot access, directly or indirectly, any tax information from the AT relating to consumers or traders, with the exception of the result of the calculation of the benefit for the purposes of its use.

This process will have to be completely transparent for the end consumer, otherwise distrust will set in and the purpose or purposes of this tax benefit will remain on paper, without any practical expression.

VAT voucher and IRS

Currently, these expenses, when assumed by end consumers, are part of the deductions from the collection of Personal Income Tax (IRS) within the scope of deductions of general family expenses, associated with the requirement of the invoice. Now, this program establishes, from the outset, that the amount that is used to calculate the value of the contribution for the purposes of the VAT Voucher will not be used for the purposes of deductions from the collection .

It will be more difficult for the taxpayer to control the amounts of expenses included in the scope of the tax deduction and the amounts used within the scope of this benefit, but we hope that the tools made available by the AT will be improved for this purpose.

VAT voucher: quarterly frequency

This tax benefit will be based on a mechanism that allows the end consumer to accumulate the amount corresponding to the total VAT paid on consumption in the identified sectors during a quarter and use this amount during the following quarter on consumption in those same sectors. Now, the question then arises: why should we wait until the end of the quarter to use this tax benefit?

The answer is that the Tax Authority does not have to refund the VAT amount, through the VAT Voucher, without the economic agents having first delivered the VAT amount settled on the invoices. Here we must remember that there are two VAT regimes in Portugal: monthly regime and quarterly regime. In the first case, the submission of the periodic VAT declaration and consequently the payment of VAT must occur by the 10th of the 2nd following month. In the second case, the submission of the periodic VAT declaration and consequent payment must occur by the 15th of the 2nd month following the calendar quarter.

In this way, the probability of the State returning VAT without having received it from economic agents will be slim . This is the aspect that most benefits the State. For the taxpayer, who wants to access this tax benefit, this deadline could be considered a disadvantage. This is because, in practice, the amount of VAT relating to the acquisition of these services will only be returned three months later.