Debt Compensation Form: Format, Filling and MORE

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If you find yourself in a debt relief situation, it is essential that you know the Debt Compensation Form. This Form facilitates the management of this procedure. For this reason, continue reading this article.

Here you will find what the Form is, a model of the format, how it is completed, what it is for. Also, what is the Tax Agency, what it is in charge of and much more information.

Debt Compensation Form Format

Regarding the format of the Debt Compensation Form, it can be said that, it is divided into four (4) parts, which are named below:

  1. The identification data.
  2. Information related to debts pending payment.
  3. The credit related information that is provided.
  4. Documents and information in conjunction with the application.

Filling out the Debt Compensation Form

To fill the Debt Compensation Form, you must follow some instructions. The compensation request must contain the information indicated below, and be presented as it appears in the model that appears in the previous point:

Identification Data

Name and surname, the company name or full name, the address of fiscal domicile, the Tax Identification Number (NIF) of the person obliged to pay and, if applicable, the full identification of the individual he is representing. Likewise, the preferred channel will be placed and the place indicated to receive the notices.

Data Related to Debt Pending Income

The identification of the debt of the compensation that is requested, indicating at least the payment, concept, period and date of validity of the interval in voluntary time.

The Data Relating to the Credit Provided

Credit identification distinguished by the Public Treasury, for the benefit of the applicant for whom the compensation is provided. Noting, the contribution, concept and the managing entity, being tax credits, the time required to the one in question.

The Place, Date and Signature of the Obliged to pay or the Individual that Represents it.

Documents / Data in Conjunction with the Compensation Request

  • Related to Debt: When the tax debt where compensation is requested has been fixed through self-assessment:
    • The official pattern of declaration-liquidation or self-liquidation, correctly completed.
    • In the case of acting already in the hands of the Administration, the day and process in which the declaration-liquidation or self-assessment was recorded, where compensation is requested, will be indicated.
  • When Related to Credit Provided
    • Verification of having requested the certification of the accounting office of the entity or institution processing the payment or expense, where the existence of the validity of the recognized credit pending payment is shown. Also the date of recognition and suspension.
    • When the credit provided comes from a tax refund, instead of the previous certificate, it will be accompanied, by the copy of the act, the opinion where the tax refund is recognized, origin of the credit provided in the petition.
  • Supplementary documents: If the request for compensation is made through the representative, the representation through a valid channel in law that is truthfully established, or by means of a statement in personal assistance.

Other data

The request for compensation the extension does not preclude the request or division of excess debt. In cases where the credits provided are varied, it is suggested to consign a request for compensation for each credit.

Request Results

  • The consignment of a request for compensation in voluntary time, makes it impossible to start the operative period of the debt for the payment of the credit provided, but not the collection of interest on arrears that may be generated, until the date the credit is recognized.
  • In the case of the request for compensation is consigned in an operating period, the actions for the sale of assets and rights on seizures can be interrupted until the decision of the compensation process. The request for compensation, It will be considered completed in the operating period When your consignment is made after the payment time has elapsed, of the voluntary debt.

What is it for?

In Articles 71 and those that follow from the Law 58/2003, of December 17 general tax, which regulates the compensation of debts, and also in Articles 55 and those that follow Royal Decree 939/2005 of July 29, which governs the General Collection regulations, is a way of termination partial or total of the tax debt.

Through these laws, the debt of the taxable individual is balanced with one or more credits recognized, through administrative acts for the benefit of this individual. Said compensation can be made, at the request of the taxpayer or by the Administration.

Compensation at the Request of the Tax Obligated Person

This individual has the opportunity to request compensation for tax debts, which are in voluntary payment time and in executive time.

Petition and Documents

The compensation request must have the surname and first name, or the business name of the taxable individual, in the same way the NIF and the fiscal domicile address. Also the tax debt that is going to be compensated and the credit that benefits it, the date and of course the signature of the interested party.

In conjunction with this request, there must be the properly completed self-assessment pattern, as well as the verification of the certification that justifies the validity of the credit that is pending payment. The payment date, the interruption for the benefit of the applicant, and the step until the compensation request is resolved.

Result of the Petition

The result of the petition will be communicated in a period of six (6) monthsAfter this period, it should be known that the request has been rejected. If the compensation is granted, the tax debt will be disregarded the frequent payment with the credit.

When the debt is for payment greater than the credit, the amount that remains follows the usual payment process. If the debt is less than the credit payment, the difference will be provided to the applicant. However, when compensation is not awarded, the normal payment process will follow.

If the request was consigned in voluntary payment time, the communication of the rejection agreement begins the time of payment of the debt, increasing in interest on arrears, originated from the termination of the payment period in voluntary time. If the request was submitted in executive time, the urgent process will begin.

The Office Compensation by the Administration

When the taxable individual is the holder, at the same time, of a credit recognized by the Administration, this can compensate ex officio the debts of that with the named credit, once the voluntary payment time has passed.

In the same way, compensation can be executed ex officio throughout the voluntary payment period, between the amounts to be entered and the remaining reimbursement of the same restricted accreditation process or of a control. Likewise, among those that originate from making a new settlement as a result of the cancellation of a previous one.

With said compensation, both the credit for the usual payment and the debt will be declared expired. In the event that the payment of the debt is greater than that of the credit, the ordinary payment regime will be used for the remaining amount. When the payment of this is less than the credit, will make the difference to the applicant.

Spanish Tax Agency

The well-known Tax Agency, is a body dependent on the Spanish State and you have the obligation to know and organize the tax system throughout Spain. It was founded in 1990 and its activities began two (2) years after its Foundation.

Its main function is to make it possible to comply with the constitutional norms in charge of both legal persons and natural persons, who act as taxpayers within the country. In such a way that, it goes together with the maintenance of the Public Treasury, through economic means.

Together with the aforementioned, the Tax Agency complies with the following obligations:

  • Process, analyze and collect the respective taxes to the State. This includes the following: Corporation Tax, the Income Tax for non-resident citizens, Value Added Tax and some special taxes.
  • Collect specified taxes by the rules established by the EU (European Union).
  • Administer the customs procedure.
  • Fight illegal actions and smuggling.
  • Track crimes related to smuggling or taxes named above.
  • Organize the autonomous administration bodies, about the pertinent taxes.

What is the Debt Compensation Form?

The Debt Compensation Form, refers to the opportunity to settle creditor and debtor amounts when the same individual is both creditor and debtor. Debt compensation is a common transaction when two (2) individuals have overdue payments and collections in common.

Said payments and collections are reduced to a single debtor or creditor amount, that is, if someone is owed € 30,000 euros and that same individual owes that someone € 7,000 euros, the normal thing is that the debt is compensated and calculated a final amount, benefiting the creditor of € 23,000 euros, instead of the creditor paying the € 7,000 that he owes and the other paying the € 30,000 euros.

You already have everything related to Debt Compensation Form, through which you can carry out the corresponding management.

You just have to have the documentation required for this purpose on hand, and present it to the relevant body, which is the Tax Agency. Good luck with your procedure.

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