VAT registrations and Simplications in Spain
Spanish VAT number
As a general rule, a foreign business must register for VAT in Spain as soon as a taxable supply is made. The following are some usual examples of taxable transactions:
- Domestic supply of goods not reverse charged: A supply of goods located in Spain to a Spanish customer where the supply is not subject to reverse charge requires a VAT registration of the supplier. However, when the supplier is not established, this scenario is very unlikely. See Reverse charge rules in Spain for more information.
- Domestic purchase of goods under the reverse charge: Where the customer is obliged to account for VAT under the reverse charge mechanism, this customer must register for VAT purposes in Spain. For example, where a non-registered business buys goods from a non-established supplier, the buyer must register for VAT.
- Supply of services not reverse charged: Foreign non-established businesses supplying services on which Spanish VAT is due must register for VAT. These services are rather exceptional, as the general B2B rule would apply or domestic reverse charge would apply.
- Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
- Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT. A limited VAT registration may apply where subsequent sales fall under reverse charge mechanism.
- Intra-Community supply: Supplying goods to another Member State is also a taxable transaction that obliges the supplier to register for VAT.
- Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.
Voluntary registration is not possible in Spain. This is, companies cannot register if they have not made a taxable transaction. A backdated registration is possible. Penalties on late filing will apply, also late payment penalties would apply in case a VAT payment has been missed. There is no registration threshold in Spain. This applies to both, established and non-established businesses. Any company performing taxable transactions should register for VAT.
Limited VAT registrations
Also, companies making only imports, or imports followed by domestic sales under reverse charge in Spain are subject to a limited registration in Spain. This is, these companies must apply for a tax identification number, but no VAT returns must be submitted, and import VAT must be recovered via the correspondent VAT refund procedure for foreign companies. The same light registration scheme applies to companies making intra-Community acquisitions of goods followed by domestic sales under reverse charge. In this case, only ESPL returns are due, as well as Intrastat if the threshold is exceeded.
Global VAT numbers in Spain
Global VAT numbers, also known as freight forward VAT numbers or limited fiscal representation, are not allowed in Spain.
Spanish VAT number Format
- Country code: ES
- Structure: ESX9999999X
- Format (excludes 2 letter alpha prefix): 1 block of 9 characters
Fiscal representative in Spain (requirements)
Non-EU businesses must appoint a Spanish fiscal representative when registering for VAT purposes in Spain. Unlike other EU countries, the fiscal representative is not jointly and severally liable for the tax debts of the company. EU businesses can register directly for VAT purposes. This means that the legal representative of the company can sign the registration form without any local Spanish involvement. However, in practice this may be difficult as the authorities often require the registration form to be signed by someone with a Spanish ID. Alternatively, the legal representative of the company can get a Spanish ID for foreigners. Marosa provides fiscal representative services in Spain. We take care of VAT and EORI registrations, VAT returns, Intrastat and customs formalities. Get in contact with us to receive a fee quote on Spanish or other European obligations.
Spanish VAT grouping
There is only an administrative simplification for VAT groups in Spain. VAT groups are not treated as a single taxable person and intra-group supplies are not disregarded for VAT purposes. Each individual entity has its own VAT obligations; however, all VAT due can be consolidated into a single payment, allowing for an administrative and cash flow advantage for groups of companies. Permanent establishments cannot, as a general rule, be part of the VAT group unless they are the head of the group.
Spanish consignment or call-off stock
The EU introduced a call-off stock simplification that all EU Member States must implement. This simplification allows businesses to operate under a consignment stock structure without having to VAT register in the country of destination. Spain has implemented this simplification. In Spanish this also known as "Acuerdos de venta de bienes en consigna".
In the past, when a foreign supplier sent goods to a Spanish warehouse to store these goods locally and supply them to a Spanish customer as and when required by the client, this foreign supplier had to register for VAT purposes in Spain.
However, where the EU call-off stock simplification applies, the Spanish VAT registration of the foreign business is not required, and the transaction is treated as a “direct” intra-Community supply of goods from the foreign business to the Spanish client, allowing a reduction of compliance costs and administrative burdens, as well as cash-flow benefits for the client.
Spanish bad debt relief
Bad debt recovery of VAT in Spain is possible, and the mechanism has been simplified. Recovering VAT from the authorities when the transaction amounts are total or partially irrecoverable. This is considered when the following conditions are met:
- One year has passed since the unpaid VAT was due, or six months if the taxpayer is a small size business (categorized as PYME in Spain).
- This situation is reflected on the company’s VAT books.
- That the debtor is a taxable person or, in case of a final customer, that the unpaid VAT amount is higher than EUR 50.
- That the taxpayer has claimed the debt making a legal claim, notarial requirement or by any other means that irrefutably proves the claim for collection to the debtor.
The modification on the taxable base must be done within the six months following the end of one year or six months term to assess the debt and irrecoverable.
There is a specific procedure to follow, including the issuance of a credit note and sent it to the debtor, submit a specific form via the electronic services of the tax authorities, including a list of supporting documents required – basically, copy of the credit notes and proof of having claimed the debt.
Have a look at our article about the update on Spanish bad debt relief procedure.
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Spanish import VAT deferral and postponed VAT accounting
Spain has introduced the simplification of postponed import VAT accounting. This regime consists on applying reverse charge on import VAT amounts.
Normally, companies must pay VAT upon importation and they are able to deduct this VAT only when the VAT return is filed. Postponed import VAT allows for payment and deduction in the VAT return, with nil cash flow impact. Effectively, this is a reverse charge mechanism on import VAT.
Spanish postponed import VAT accounting is only allowed for businesses filing monthly VAT returns. These are companies with a turnover above 6 M €, companies registered in the Monthly Refund Registry and VAT groups. The application must be filed within the month of November prior to the year in which the simplification will apply. For example, if your business would like to benefit from this simplification as from 1st January 2023, you must file your application between 1st and 30th November 2022. Additional formalities must be met.
Import VAT deferral allows import VAT to be paid at a later stage. Some countries allow a period of up to 40 days to make the payment after the importation is made. Spain has not introduced this simplification.
Spanish VAT warehouse and Customs warehouse
Customs or bonded warehouse regime is available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero rated. There are certain administrative obligations such as form 380 and specific bookkeeping requirements. Customs warehouses are referred as "Deposito Aduanero" in Spanish. VAT warehouse is available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. VAT warehouses are referred as "Deposito distinto del aduanero" in Spanish.
Cash accounting scheme in Spain
This regime is available in Spain. An application for Cash accounting regime must be made and the following requirements must be met:
- A registration form must be filed during the month of December of the year prior to the application of the regime.
- Only businesses with a turnover below 2M€ can apply.
- Business gifts are 0% deductible unless for promotion samples or low value gifts (less than 200€ per year)
- A number of transactions and sectors are excluded: fisheries industry, agriculture, simplified margin scheme for SME, intra-Community acquisitions, reverse charge supplies and imports.
- The application of this regime must be stated on the invoice.
- Additional information should be included in the VAT books for supplies under this regime
- All these supplies should be reported separately in the Annual Sales and Purchases Listing (Form 347)