Documentation/ Checking the document header/ Equivalence surcharge
Equivalence surcharge
A Spanish charge on top of VAT, borne by retailers on that special scheme. It shows as a second amount on the same net, and if it is not recorded the document will not add up.
Document › General tab › the tax block › Apply surcharge button
On this page
What it is and who it affects
The equivalence surcharge is a special Spanish VAT scheme for retailers: instead of accounting for the tax on their sales, they pay it to their suppliers as a surcharge added to the purchase invoice.
Which in practice means anybody on that scheme receives invoices with two amounts on the same net, the VAT and the surcharge, and both have to be recorded.
It affects the buyer, not the seller: it is a condition of the customer that the supplier reflects on their invoice.
How it appears on the document
In the tax breakdown, beside the VAT line, with its own rate and its own amount. On the header, the total shows as Total equiv. surcharge. Some layouts label it Rec. Eq., R.E. or just surcharge.
The rates are tied to the matching VAT rate, so a document with two VAT rates can carry two different surcharges.
How to apply it
The system picks the surcharge up when the document breaks it out clearly. When it does not, or when it has been read without it, the header has an Apply surcharge button, described in the application itself as working the surcharge out automatically for retailers on the special scheme.
Apply it and the system works out the surcharge that matches the VAT amount already there and puts it on the document.
The calculation
| What | Worked out on |
|---|---|
| VAT amount | The net amount, at whatever rate applies. |
| Surcharge amount | The same net amount, at the matching surcharge rate. |
| Document total | Net + VAT + surcharge. |
The surcharge is not worked out on the VAT amount, but on the same net that the VAT was. It is a common misreading when people check the figures by hand.
What to check
- That the document really carries it. Not every supplier applies it, and not every buyer is on the scheme.
- That the rate is the right one for that line's VAT rate.
- That the total includes both amounts. That is where you notice one is missing.
- That it has not been counted twice: if the document already broke it out and you apply the calculation on top, the amount goes in twice.
When the surcharge is why it does not add up
It is one of the usual causes of both the Review totals and the Review VAT status: the document adds an amount the system has not picked up, so net plus taxes does not reach the total.
| What you see | Likely cause | What to do |
|---|---|---|
| Something is short of the total, and the supplier regularly bills a retailer | The surcharge was not extracted. | Apply the surcharge from the header. |
| The total is more than net plus taxes | The surcharge has been counted twice. | Go over the breakdown and take the duplicate out. |
| The surcharge is there but at an odd rate | It has been tied to a VAT rate that is not the one on that line. | Correct the rate in the breakdown. |
| Error applying the surcharge | The calculation could not be completed. | Check there is a valid net and VAT amount, and try again. |
If every document from one supplier arrives without the surcharge, there is no sense applying it one by one for ever: that is one to raise with support, who can tune the extraction rules for that issuer.