VAT refund - Cash accounting scheme

Cash accounting scheme has been implemented in the Spanish VAT Act since 01/01/2014. This measure has also been implemented in the following countries: Bulgaria, Italy, Luxembourg, Hungary, Austria, Portugal and Romania.

Member states may provide within an optional scheme that the right of deduction of a taxable person whose VAT solely becomes chargeable be postponed until the VAT on the goods or services supplied to him has been paid to his supplier [art. 68a of the VAT Directive].

Qualification of a transaction - Supply of goods with installation

As from 01/01/2015, the transaction will be treated as a supply of goods with installation in Spain provided the installed element is about 15% of the value of the contract.

Where the goods dispatched or transported by the supplier, by the customer or by a third person are installed or assembled, with or without a trial run, by or on behalf of the supplier, the place of supply is deemed to be the place where the goods are installed or assembled [art. 36 of the VAT Directive].

Non-resident companies – VAT refund via an European bank account

As from April 2016, it is possible to use an EU/SEPA bank account number for refund of a VAT credit. Non-residents are no more required to open a Spanish bank account in order to receive Spanish VAT refund accordingly.

Note that if you are VAT registered in Spain, a Spanish bank account is still necessary to pay VAT due.

New way of communicating with the tax authorities

Since 01/07/16, all communications towards the Spanish tax authorities from companies filing monthly VAT returns have to be made electronically through the web portal of the tax authorities. Failure to comply with this obligation will result in a penalty.