Do you know what a one-off transaction is? This option is interesting for people who provide services but do not have an activity registered with the Tax Authorities.
In other words, it is an alternative to issuing receipts, without the individual having to register as a self-employed worker.
As this is a subject that still raises some questions, we have decided to clarify the main issues that tend to arise throughout this article.
One-off transaction: What is it and how can you issue one?
When an extra opportunity arises, but the worker does not have and does not intend to register an activity with the Tax Authorities, it is possible to use a one-off transaction.
In short, a one-off transaction or single transaction is a document intended to record income from a service provided or a commercial sale that was not planned and will not be repeated.
In other words, it is an alternative for issuing an invoice or receipt for a one-off or occasional service or sale.
One of the main advantages of using this document is that the individual does not have to register as a self-employed worker or register with Social Security.
In addition, taxpayers who issue one-off transactions are exempt from the organised accounting regime in relation to these transactions.
However, it is important to note that the worker cannot issue an amount exceeding €25,000 per year.
Anyone exceeding this amount will be required to submit a Declaration of Commencement of Activity.
How can it be issued?
To issue a single transaction, you must access the Tax Authorities Portal and log in using your tax identification number and password.
Under the “Invoices and Green Receipts” option, you must complete the form with the correct information.
If you do not have an activity registered, the Tax Authorities automatically assume that it is a one-off transaction.
The issuer can choose between three types of documents:
- Invoice: contains the tax identification details of the parties involved, a description of the transaction and the corresponding amount;
- Receipt: issued when payment is made as proof of payment of the previously issued invoice;
- Invoice-receipt: issued when the date of the transaction and the date of payment coincide.
A very common question among workers who issue these documents is: “How many one-off transactions can be issued per year?”
The truth is that the legislation is not very clear on this matter. Therefore, if you have already issued a single transaction during the year and need to issue another, it is best to seek information about your specific situation from the Tax Authorities.
What are the obligations of someone who issues a one-off transaction?
Payment of Value Added Tax (VAT) is one of the tax obligations that must be fulfilled by anyone issuing this document.
In most cases, the applicable rate is 23%, with the exception of services covered by Article 9 of the VAT Code.
These services include professions such as doctors, dentists, psychologists, actors, musicians, among others.
Regarding Personal Income Tax (IRS), there is an exemption from withholding at source when the income does not exceed €12,500.
When the value of the transaction exceeds this amount, withholding at source is required, with the most common taxable base being 100%.
However, it is important to understand that being exempt from withholding at source does not mean that you are exempt from paying the tax.
When submitting the annual income tax return, you must complete Model 3. In other words, the issuer may choose to pay the IRS when the transaction is issued or at the end of the year.
The applicable withholding tax rate ranges from 11.5% to 25%, with the percentage depending on the activity that generated the income.
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