What does this guide contain?
The guide provides you with practical VAT information for Spain:
- Your VAT registration in Spain
- Your VAT obligations TVA in Spain
- The invoicing rules in Spain
- A VAT credit refund in Spain
VAT REGISTRATION IN SPAIN
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Spanish tax authorities before starting your activities.
Failure to register the commencement of activities in the Spanish territory is penalized with a fixed penalty of € 400.
What documents do I need to provide when I register?
If your company wishes to register for VAT in Spain, it is essential to contact the Spanish tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Spanish tax authorities may require some of these documents to be translated into Spanish.
How long does it take to get a VAT number?
If your file is complete, it generally takes one month to obtain the VAT number.
Is a fiscal representative necessary?
Non-European companies cannot register for VAT themselves in Spain. They have to do it through a VAT representative. This is a local company that will represent you to the local VAT authorities. He is responsible for the respect of all your VAT obligations, including those of which he was not aware. For this reason, he may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a VAT representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
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VAT OBLIGATIONS IN SPAIN
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Spanish tax authorities.
However, companies filing monthly VAT return are submitted to the Immediate Supply of Information (SII) and must keep their business records on the website of the Ministry of Finances by electronically providing the information requested therein, together with some additional data of the invoices (but not the invoices themselves).
Each sales invoice must be submitted no later than the fourth working day from the date of the invoice. As for purchase invoices, they must be submitted at the latest on the fourth working day following the date the invoice is registered in the books.
When do you have to file a VAT return?
Your company is required to file periodic VAT returns on a quarterly basis if your annual turnover in the preceding year did not exceed € 6.010.121 and on a monthly basis otherwise. Returns also have to be filed on a monthly basis when your company is registered in the Special Monthly Refund Register [REDEME].
The VAT return must be filed electronically by the 20th day of the month following the end of the taxable period.
The VAT return for Q4 and for the month of December must however be filed by January 30th of the following year.
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
Your company is required to file an annual recapitulative VAT return [Modelo 390] summarizing all taxable transactions performed/received during the calendar year plus additional information no later than January 30th.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Spanish VAT?
The company must pay the VAT due no later than the 20th day of the month following the taxable period.
The VAT expert's eye
Every taxable person who is liable for the tax must pay the net amount of VAT when filing the VAT return. Every taxable person who is liable for the tax must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (Art. 206 of the VAT Directive).
When should the intra-EU statement be filed?
The company is obliged to file an electronic intra-Community listing at the latest on the 20th day of each month [or quarter], except for the last statement of the year [December or Q4] which is due on January 30th of next calendar year.
The annual declaration period for ESL has been abolished. As from 2020, modelo 349 may therefore be submitted on a monthly or quarterly basis only.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
INVOICING RULES IN SPAIN
Does the invoice have to include VAT? Reverse charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in Spain for foreign companies:
For supplies of goods:
The reverse charge is applicable to all domestic supplies of goods made by a business not established in Spain, provided that the customer is VAT registered in Spain (whether he is established or not in Spain). The reverse charge is therefore also applicable between two non-established taxpayers.
For supplies of services:
The reverse charge is applicable to all domestic supplies of services made by a business not established in Spain (whether he is VAT registered or not in Spain) , provided that the customer is established for VAT purposes in Spain.
What are the mandatory mentions on an invoice?
The VAT Directive lays down the minimum information that you must include on your invoice. In some cases, countries may add additional compulsory information. Particular attention should be paid to the conversion rates when the currency used on the invoice is not that of the country in which the transaction takes place, and to the specific statements justifying the legal reason why VAT is not charged.
What VAT rate should be mentioned on an invoice?
Spain has 3 differents VAT rates :
- Standard rate : 21%
- Intermediary rate : 10%
- Reduced rate: 4%
VAT REFUNDS IN SPAIN
How can I recover VAT in Spain?
There are several methods to obtain refunds of Spanish VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in Spain:
- If your company has a VAT number in Spain, it will have to submit a refund application in the form and within the timeframe required by local regulations. In principle, the VAT credit is automatically transferred to the following month. Under the general procedure, your company may only apply for the refund in the last VAT return of the year.
- If your company is established in a European country and does not have a VAT number in Spain, it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
- If your company is established outside Europe and does not have a VAT number in Spain, it will have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
Is Spanish VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
No input VAT can be recovered on any of the following expenses:
- Food and drinks ;
- Accommodation and catering ;
- Transfer and travel services ;
Nevertheless, VAT on the above expenses could be totally or partially deductible if they are deductible from a corporate tax point of view or intended for business purposes.
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