Recent tax updates in Spain:
• B2B e-invoicing draft regulation published
• New invoicing requirements draft regulations
• A quick guide for IPT
Spain VAT compliance is dense, but it doesn’t have to be hard to achieve. Spanish VAT legislation has been amended numerous times since it was introduced, and there are other regulations organisations need to be aware of too – from SII to e-invoicing.
This is your hub for all things VAT compliance in Spain, covering all mandates and requirements that may apply to your business. Use this page to gain an in-depth understanding of Spanish VAT rules and regulations and how to comply.
Spain is a complex country for VAT rules, with many elements that companies need to be aware of. These include:
Prior to July 2021, foreign sellers were required to be VAT registered if their annual imports into Spain exceeded 35,000 euros. From that date, as per an EU-wide ruling, the threshold was lowered to 10,000 euros. If a company’s annual turnover exceeds that amount, it is liable for VAT in all EU Member States.
Companies that supply goods or services that are subject to VAT in Spain must apply for a domestic VAT ID with their local Administración de la Agencia Estatal de Administración Tributaria (AEAT) branch and appoint a Spanish fiscal representative to communicate with the Spanish tax office on their behalf.
Sovos’ team of experts are specially equipped to handle VAT registration for businesses. Contact us today for further information.
In Spain, VAT liability applies to the following types of transactions:
Spain has strict requirements for the creation, processing and storage of invoices. Invoices must be issued by the 16th of the month following the supply for taxable customers and at the time of the supply for non-taxable customers.
Legislation in Spain declares invoices must include basic details such as:
The Spanish government has published a draft regulation with the framework for implementing mandatory B2B e-invoicing. As it is still a draft, taxpayers can expect changes before publication of the final version.
Read our dedicated blog for more information on Spain B2B e-invoicing
The EU established the One Stop Shop (OSS) in July 2021, implementing an EU-wide VAT threshold of 10,000 euros and making cross-border online sales in the region simpler. This is part of the EU VAT e-commerce package.
Those registering for the scheme are required to provide specific information to the Member State of identification, and Member states are free to choose how they collect such information electronically.
In addition to OSS, businesses trading in Spain and other EU Member States need to comply with Intrastat. There are country-specific Intrastat thresholds that, once exceeded, require registration and returns for compliance. This system is in place to collect information and produce statistics on the movement of goods between EU Member States.
The VAT law in Spain is known as LIVA and has been amended several times so it aligns with EU VAT legislation. Spain does not have a VAT registration threshold, meaning both resident and non-resident taxpayers must register for VAT in the country before they provide taxable supplies.
Typical required information on VAT invoices in Spain include the date of issuance and transaction, supplier’s VAT number, description of goods or services, net value of supply, VAT rate(s) applied and addresses of both the supplier and customer.
The standard VAT rate in Spain is 21%. That said, the country also has zero-rated goods which must be reported on VAT returns – even though no VAT will be charged on the products.
Spain has a reduced VAT rate of 10% for health products, hotels, restaurants, and sports and entertainment activities, and 4% for certain food items, books, magazines and newspapers.
Spain does not have a VAT registration threshold, meaning both resident and non-resident taxpayers must register for VAT in the country before they provide taxable supplies.
It should be clear now that VAT compliance in Spain can be a tall, complex task. Future-proof your compliance with Sovos, a single vendor with both global and local tax expertise.
Contact our expert team today so you can concentrate on growing your business without compliance concerns.
TIN matching typically occurs at two points when paying a vendor or customer: when onboarding a new vendor or customer based on information collected on Form W9 and prior to reporting amounts paid on 1099s to ensure name/TIN information is still accurate. When it comes to onboarding new vendors or customers, there are two additional verifications beyond TIN matching businesses must be aware of. Understanding these verifications can help prevent your organization from working with fraudulent individuals or businesses.
Read more about verifications beyond TIN matching.