The Spanish Ministry of Finance has published a draft resolution that will – once adopted – establish the requirements for software and systems that support the billing processes of businesses and professionals. This law will have a significant impact on the current invoice issuance processes. It will require implementing new invoice content requirements, including a QR code, and the generation of billing records by January 2024.

The regulation is also intended to adapt the Spanish business sector, especially SMEs, micro-enterprises, and the self-employed, to the demands of digitization. For this, it is considered necessary to standardise and modernise the computer programs that support the accounting, billing, and management of businesses and entrepreneurs.

Scope of the regulation

The regulation establishes the requirements that any system must meet to guarantee the integrity, conservation, accessibility, legibility, traceability and inalterability of the billing records without interpolations, omissions or alterations.

The new rules established in the regulation will apply to:

Companies that do not fall within the above categories do not need to comply, but those who do must ensure their computer systems are adapted to this regulation as of 1 January 2024.

New invoice content requirements: ID and QR codes

Invoices generated by the computer systems or electronic systems and programs that support the billing processes of businesses and professionals must include an alphanumeric identification code and a QR code, generated per the technical and functional specifications established by the Ministry of Finance.

Billing system requirements

The computer systems that support billing processes must have the capability to:

To achieve these ends, all computer systems must certify that they ensure the commitment to comply with all the requirements established in this regulation through a “responsible statement”. The Ministry of Finance will establish the minimum content of this statement later in a new resolution.

Billing record content and its optional transmission

The billing records must comply with several content requirements laid down by the regulation.

The taxpayers using computer systems to comply with their invoicing obligations may voluntarily send all its billing records generated by the computer systems to the AEAT automatically by electronic means. The response of a formal acceptance message from the AEAT will automatically mean that these records have been incorporated into the taxpayer’s sales and income ledgers.

Tax administration audits

The AEAT may appear in person where the computer system is located or used and may require full and immediate access to the data record, obtaining, where appropriate, the username, password and any other security key that is necessary for full access.

The AEAT may request a copy of the billing records, which companies may provide in electronic format through physical support or by electronic means.

Application to the B2B e-invoicing mandate

The regulation doesn’t include any specific rule for the B2B e-invoice mandate draft decree currently being discussed in Congress and waiting for approval. However, if the mandate is approved, all the B2B e-invoices issued under this draft decree will have to comply with all the new rules established in this regulation.

Next steps

While this new regulation does not seem to take Spain further down the continuous transaction control (CTC) route, the proposal has clear similarities with Portugal’s invoice requirements.

The draft resolution establishing these is currently open for public consultation until 11 March 2022. Once this resolution is approved, the Ministry of Finance will publish the technical and functional specifications needed to comply with the new requirements and the structure, content, detail, format, design and characteristics of the information that companies must include in the billing records.

The Ministry of Finance will also publish the specifications of the signature policy and the requirements that the fingerprint or ‘hash’ must meet. Once these details are published, it will be clearer whether Spain is going down the Portuguese route or carving out its own path.

Take Action

Need help staying up to date with the latest VAT and compliance updates in Spain that may impact your business? Get in touch with Sovos’ team of experts today.

Spain has a near real-time reporting system for domestic transactions

Spain SII

Spain is one of the first EU nations to adopt the Continuous Transaction Controls (CTCs) method, with the introduction of mandatory near real-time invoice data reporting in 2017. With this requirement, Spain’s tax authority, the AEAT, aimed to streamline refunds, provide taxpayers accurate data for returns, conduct audits more effectively and fight VAT fraud.

Taxable persons who are in scope must report invoice data to the tax authority through a platform known as Suministro Inmediato de Información (SII) within four business days following the date of issue.

In 2020 the tax administration announced a new version of the SII, introducing a ledger to record operations related to the sale of goods in consignment. This came into effect on 1 January 2021.

Get the information you need

Mandate Quick Facts

  • The Spanish mandate applies to companies with an annual turnover above €6 million, companies that are part of VAT groups; and, companies using the REDEME system.
  • The following records must be sent to the tax authority:
    • Registered book of issued invoices
    • Registered book of received invoices
    • Registered book of investment goods
    • Registered book of certain intra-community operations
  • The transmission of the information must be via web services available to exchange XML messages.
  • Some formal obligations are reduced as taxpayers will no longer be required to file the information returns form 347 (third-party information), form 340 (transactions in register books) and form 390 (VAT annual summary).
  • In 2020 the Spanish tax administration introduced a service to pre-populate the periodic VAT return (Modelo 303) using the information that taxpayers supplied via the SII.

Mandate Rollout Dates

  • 2 January 2017: The immediate supply of information began on a voluntary basis for taxpayers in Spain.

  • 1 July 2017: The mandatory phase of the immediate supply of information for taxpayers under the scope of the mandate.

  • 1 January 2018: The period to supply the information was reduced from 8 days to 4 days. The mandate was also extended to other Spanish territories (Basque Provinces and Canary Islands).

  • 1 January 2020: Introduction of a ledger to record operations related to the sale of goods in consignment.

Penalties

  • Omissions or inaccuracies in the information reporting obligation have a penalty of up to 1% of the total amount missed with a maximum of €6,000.

  • Late reporting of real-time electronic VAT ledgers will trigger a penalty of 0.5% of the total amount reported, with a minimum of €300 and a maximum of €6,000 per quarter.

  • Errors or omissions in the Book of certain intra-Community transactions and Book of investment goods has a fixed penalty of €150.

Sovos Helps Companies Stay Compliant with Spain’s SII

Sovos serves as a true one-stop-shop for managing all VAT compliance obligations in Spain and across the globe.

Sovos supports the Suministro Inmediato de Información (SII) platform, ensuring our customers remain compliant with the legal and technical framework developed by the Spanish tax authority (AEAT).

Sovos experts continually monitor, interpret, and codify these changes into our software, reducing the compliance burden on your tax and IT teams.

We hosted a webinar about Insurance Premium Tax (IPT) in Spain.

Topics covered included the Conscorcio reporting system, tips for effective and accurate compliance, the penalty regimes currently in place and the latest regulatory updates.

Although our expert team answered plenty of questions they didn’t have time for everyone. Here’s a helpful summary.

Is all health insurance exempt from IPT in Spain?

We understand that health and sickness insurance are exempt from IPT in Spain. For completeness, this doesn’t include Accident cover, which should be taxable at 8%. Article 5 of the IPT law provides for the exemption.

You mentioned that international insurance risks belong to the exemptions. Is this also true for international freight forwarder liability insurance? And for international marine cargo insurance?

Article 5 of the IPT law provides an Exemption for: “insurance operations related to ships or aircraft that are destined for international transport, except for those that carry out navigation or private recreational aviation”. Two pieces of case law (1073-00 (09/05/2000) and V1233-03 (13/06/2008)) provide further details on the exemption.

Under Act 22 of Law 37/1992 (VAT Law): “international transport is considered to be that which takes place within the country and ends at a point located in a port, airport or border area for immediate dispatch outside the Spanish mainland and the Balearic Islands”. We therefore understand insurance, such as freight forwarder liability and marine cargo, gain the IPT exemption to the extent they relate to international transport.

I’m preparing CCS on a monthly basis manually in Excel. Is there a Microsoft tool that can create the final report?

We’re not aware of any Microsoft tools that can prepare the CCS file for monthly reporting. This file can be complex. For our customers we use our proprietary software to generate the relevant file from an Excel input template.

What is CLEA?

CLEA is the surcharge to fund the winding-up activity of insurance undertakings. It was included in the Modelo 50 CCS and is due for all insurance contracts signed on risks in Spain, other than life insurance and export credit insurance on behalf of or with the support of the State.

The type of surcharge destined to finance winding-up activity of insurance companies is made up by 0.15% of the aforementioned premiums.

Do insurers have to be registered in all the provinces in Spain?

We understand all insurers should register in the provinces where they have risks located. This is a compliant requirement because insurers need to declare premium taxes to the correct tax authorities according to the location of risk.

I understand you can submit monthly policies to Consorcio even if the postcode is wrong. How should we proceed in the future?

The postcode in addition to the correct address where the risk is based are very important. Spanish law states that businesses must declare the premium tax according to the location of the risk. Sometimes, non-domestic insurers provide the location of risk based in Spain using the address of the insured. For example, a German insurer who issues a policy insuring a house in Spain, should provide the address and postcode of the house in Spain.

If we don’t have this data for the monthly submission we will need, in the future, to declare the Fire Brigade charge report. The CCS system will reject a report with an incorrect postcode as a result.

When reporting Consorcio liabilities, should the lead insurer declare on behalf of its co-insurers?

Insurers can elect to declare only their share of the co-insurance agreement should that be the agreement amongst the insurers that are party to the contract.

Where Consorcio cannot recover an outstanding sum from a co-insurer, however, it’s likely that it will hold the lead insurer accountable for that amount. Alternatively, the lead insurer can pay the surcharges on behalf of all follow insurers. So there is to some extent an element of discretion by the relevant insurers.

Is there a list or explanation of each movement and declaration type to report to Consorcio?

We’re able to provide this to our customers upon request.

Take Action

Still have questions about IPT in Spain? Contact our experts or watch our recent webinar, The Complexity of Insurance Premium Tax in Spain