What is Model 420?
Model 420 is the quarterly declaration for the IGIC (General Indirect Canary Tax) that self-employed individuals and businesses must submit if they carry out activities subject to this tax in the Canary Islands. In this model, the IGIC corresponding to the operations carried out during each quarter is self-assessed.
Who is required to submit Model 420?
All self-employed individuals who carry out economic activities in the Canary Islands subject to the IGIC are required to submit Model 420. This includes both the sale of goods and the provision of services within the Canary Islands.
What is declared in Model 420?
In Model 420, both the IGIC collected (repercutido) and the IGIC paid (soportado) during the quarter must be declared. Specifically, you must declare:
- IGIC Repercutido: This is the IGIC charged to your customers for the sale of goods or the provision of services within the Canary Islands. This should be declared in the model according to the applicable tax rate for each transaction (e.g., general, reduced, or super-reduced rate).
- IGIC Soportado: This is the IGIC paid to your suppliers when purchasing goods or services used in your business. This IGIC can be deducted, reducing the total amount you owe to the Tax Agency.
How is the settlement calculated?
The model is used to calculate the difference between the IGIC you have collected (repercutido) and the IGIC you have paid (soportado). If the IGIC collected is higher than the IGIC paid, you will need to pay the difference to the Canary Islands Tax Agency (ATC). On the other hand, if the IGIC paid is higher than the IGIC collected, you can request a refund or compensation for the excess.
What information should be included in Model 420?
- Sales and services provided during the quarter, specifying the taxable base and the tax rate applied.
- Purchases and expenses related to the activity to deduct the IGIC paid.
- The result of the self-assessment of IGIC, calculating the difference between the IGIC collected (on sales) and the IGIC paid (on purchases).
What is the frequency of submission?
Model 420 is submitted quarterly and must be filed within the first 20 days of the month following the end of the relevant quarter. Specifically:
- First quarter (January-March): deadline by April 20.
- Second quarter (April-June): deadline by July 20.
- Third quarter (July-September): deadline by October 20.
- Fourth quarter (October-December): deadline by January 20 of the following year.
How is Model 420 submitted?
Model 420 is submitted electronically through the Canary Islands Tax Agency's (ATC) online platform. A digital certificate or access to the ATC platform is required for submission.
What if I have no operations during a quarter?
Even if you had no operations during a quarter, if you are registered with the IGIC taxpayers' census, you must still submit Model 420, declaring "no activity" or no transactions, if no sales or purchases occurred during that period.
What should I do if I haven’t submitted Model 420 during the year?
If you haven't submitted Model 420 within the required deadline, it’s important to regularize the situation as soon as possible. If you’re unsure, we recommend contacting ayuda@xolo.io, and we will guide you through the steps to ensure you comply with your tax obligations.