Cash-accounting VAT: a guide to the special cash accounting scheme

The special cash accounting scheme (RECC) — “cash-accounting VAT” — allows freelancers and companies with annual turnover of up to €2,000,000 to defer paying output VAT to the tax agency until they collect the invoice instead of advancing it when the invoice is issued. There are two trade-offs: input VAT on purchases cannot be deducted until they are paid, and there is a final deadline — 31 December of the following year — when the tax becomes chargeable even if the invoice is still unpaid. It is governed by articles 163 decies to 163 sexiesdecies of Law 37/1992 on VAT, introduced by Law 14/2013 of 27 September in support of entrepreneurs, and has operated since 1 January 2014 (in force in 2026).

What cash accounting is and the problem it solves

Under the standard VAT scheme, tax becomes chargeable when the transaction takes place (the goods are supplied or the service is provided, article 75 of Law 37/1992), not when payment is received. In practice, you issue an invoice in February, your customer pays you in July… and you have already paid the VAT on that invoice in the first-quarter self-assessment in April. For months, you have financed the tax agency with money you do not yet have.

Cash accounting reverses that logic. Under RECC:

• Output VAT becomes chargeable when the price is paid in full or in part, for the amounts actually received.
• It is only reported and paid in the self-assessment for the period in which payment is received.
• If payment never arrives, VAT becomes chargeable no later than 31 December of the year immediately following the transaction.

It is a voluntary scheme: nobody forces you to join even if you meet the requirements. Nor is it an à la carte scheme: once you are in, it applies to all your transactions that are not excluded, and the symmetry means your deductions also move to cash accounting.

For businesses with long payment terms — those that work with large customers, public authorities or sectors where 90-day payment is customary — the appeal is obvious: VAT stops creating a cash-flow hole between invoicing and collection.

Who can join: requirements and exclusions

The eligibility requirements are in article 163 decies of Law 37/1992 and its implementing regulations (Royal Decree 828/2013, which added a specific chapter to the VAT Regulations, RD 1624/1992). In force in 2026:

Turnover is calculated as the total value of supplies of goods and services in the previous year, excluding VAT itself (and, where applicable, the equivalence surcharge and agricultural compensation).

How chargeability works: collect, then pay — subject to a deadline

The mechanics of the scheme, according to the AEAT itself (in force in 2026), are:

• Output VAT: becomes chargeable when the price is paid in full or in part, for the amounts actually received. If payment has not been received by 31 December of the year immediately following the transaction, it becomes chargeable on that date.
• Charging VAT: the invoice is issued with VAT within the usual deadlines; what is deferred is chargeability — and therefore the obligation to pay it — not issuance.
• Input VAT: the right to deduct arises when you pay your suppliers in full or in part or, if you have not paid, on 31 December of the following year.

Worked example

A design studio using RECC issues an invoice on 10 March 2026 for €10,000 + €2,100 VAT to a customer who pays on 120-day terms:

The symmetry almost nobody mentions

RECC is not just about “paying later”: it also means deducting later. If you are in the scheme, you cannot deduct VAT on a supplier’s invoice when you receive it, but only when you pay it. The symmetry benefits businesses that pay for purchases immediately and collect sales later. For those that negotiate long terms with suppliers and collect quickly, the scheme may be directly counterproductive.

Transactions excluded from the scheme

Even if you are in the scheme, certain transactions follow the general chargeability rules (article 163 duodecies of Law 37/1992; AEAT, in force in 2026):

• Those under other special schemes: simplified, agriculture, livestock and fishing, equivalence surcharge, investment gold, electronically supplied services and groups of entities.
• Exempt exports and intra-Community supplies (articles 21, 22, 23, 24 and 25 of the VAT Law).
• Intra-Community acquisitions of goods.
• Reverse-charge cases (article 84.One.2, 3 and 4).
• Imports and equivalent transactions.
• Self-supplies of goods and services.

In practice, this means a business using RECC lives with two different chargeability clocks: cash accounting for ordinary domestic transactions and the general rule for everything above. That is another reason to automate collection and payment tracking properly.

How to join and leave: option, renunciation and exclusion

Everything is handled through the tax registration declaration — form 036; the former simplified form 037 was abolished from 3 February 2025 (Order HAC/1526/2024) — (articles 61 septies and 61 octies of the VAT Regulations; AEAT, in force in 2026):

1. Joining: when filing the declaration that the activity is starting, or during December before the calendar year in which it is to take effect. If you want to apply cash accounting in 2027, select the box in December 2026.
2. Renewal: the option is automatically renewed every year while you do not renounce it and continue to meet the requirements.
3. Renunciation: also in December of the preceding year, and it is binding: you cannot rejoin the scheme for at least three years.
4. Exclusion: automatic if turnover exceeds €2,000,000 or cash receipts from the same recipient exceed €100,000, with effect from the following year. You can opt in again if you meet the requirements in later years.

Formal obligations: invoices, registers and form 303

The scheme requires complete traceability of collections and payments (RD 828/2013; AEAT, in force in 2026):

• Invoices: every invoice for a transaction under the scheme must include the exact legally required wording “régimen especial del criterio de caja” (“special cash accounting scheme”). Without it, your customer has no way of knowing that their deduction is deferred.
• Register of invoices issued: in addition to the usual details, the collection dates for each transaction, in full or in part, with each amount separately, and the bank account or collection method used.
• Register of invoices received: the payment dates, amounts and payment method. This requirement also applies to recipients outside the scheme who receive RECC invoices.
• Form 303: as well as reporting VAT chargeable under cash accounting in the general boxes, form 303 has specific information boxes:

These boxes are for information: they do not determine the amount payable by themselves, but they allow the AEAT to compare what became chargeable under cash accounting with what would have become chargeable under the general rule.

Managing this in spreadsheets is exactly the kind of task that ends in errors. A management system that already records every collection and payment against its invoice — as Frihet does, matching bank collections to invoices and carrying payment dates and methods into the registers — turns the scheme’s heaviest formal obligation into an automatic by-product of working with organised data. With the arrival of VeriFactu (mandatory for companies from 1 January 2027 and for freelancers from 1 July 2027, under Royal Decree-law 15/2025), invoicing traceability ceases to be optional for everyone, whether or not they use cash accounting.

The effect on your customers: the fine print that discourages adoption

This is why RECC, despite its apparent appeal, has lower take-up than expected: it affects the recipient of your invoices even if they are not in the scheme.

Article 163 quinquiesdecies of Law 37/1992 states that recipients of cash-accounting transactions — whether or not they use the scheme themselves — can only deduct input VAT on those invoices when they pay them (or on 31 December of the following year if they have not). In other words:

• Your customer receives your invoice bearing the wording “régimen especial del criterio de caja”.
• Even if they are taxed under the standard scheme, they cannot deduct that VAT until they pay you.
• They also assume additional record-keeping duties (recording payment dates and methods for your invoices).

For a finance department accustomed to deducting all input VAT for the quarter, a cash-accounting supplier creates administrative friction. Some large companies penalise it in their purchasing policies. Before opting in, consider how many of your customers are larger businesses and how they will react.

Is cash accounting right for you?

There is no universal answer: it is a cash-flow decision with commercial and administrative costs. As a general rule:

If you tick most of these boxes, RECC will probably save you real money every quarter. If your problem is not collection time but permanent non-payment, the scheme only buys time: the underlying tool is the taxable-amount amendment under article 80 LIVA and, above all, a collection process that does not let invoices die of old age.

Cash-accounting VAT is ultimately a legal patch for a cash-flow problem. The structural version of the solution is to see in real time which invoices have been collected, which fall due this week and how much VAT you will pay on the 20th — with or without a special scheme.