Do you really need a tax representative for your VAT paperwork ?

Required for non EU based businesses

under the following circumstances:

Voluntary for EU companies

Carrying out any of the following activities:

Territory, implementation, authority

Tax category : Value-added tax (VAT)
Local tax name : Impuesto sobre el Valor Añadido
Local tax short name : IVA
Legal basis : VAT Act (Law 37/1992 – Ley del Impuesto sobre el Valor Añadido [LIVA]); VAT Regulation (Royal Decree 1624/1992)
Additional documents : Law 58/2003, General Tax Law Royal Decree 1065/2007 Further decrees and orders regulating special topics
Introduced : 1 January 1986

European VAT territory : 

– Mainland & Balearic Islands : Yes
– Canaries Islands: no
– Ceuta: no
– Melilla: no

European excise duties territory :

– Mainland & Balearic Islands : Yes
– Canaries Islands: no
– Ceuta: no
– Melilla: no

European Customs territories :

– Mainland & Balearic Islands : Yes
– Canaries Islands: Yes
– Ceuta: no
– Melilla: no

Trading agreements and memberships: European Union (EU) Member State

Competent authority     Ministry of Finance
Revenue website : http://www.aeat.es
Ministerium website : http://www.minhap.es

VAT registration

The same rules as for domestic persons apply.
Foreign persons have to register, if they supply goods or services in Spain, except if they supply ONLY to companies established in Spain as per art. 194 of the VAT directive (see reverse charge below).

Reverse charge

According to Art. 84 of the VAT Act the reverse charge procedure is widely applied, with only a few exceptions.

Register with tax representative in Spain

In case a tax representative is appointed additional documents are necessary (power of attorney of the representative, authorization form, etc.).

Usually a tax representative must be appointed by non-resident taxable persons. Taxable persons established in an EU Member State, Ceuta, Melilla, or in a country, which has signed a mutual assistance agreement with Spain, are except from this obligation.

The tax representative acts on behalf of the taxable person, but is not liable for the VAT-related liabilities.

VAT rates

Standard : 21%
Reduced :  10%
Super reduced : 4%
Parking : –
Zero : 0%
Deduction or refund global restriction : No

National Tax Number format :   A – 1 2 3 4 5 6 7 8 (further details here)

Thresholds:

VAT Registration : No minimum
Distance selling: EUR 35,000
Intra-Community acquisitions :  No minimum

Deduction / refund

Refund (companies not liable to submit returns and deduct)

Recovery of VAT by non EU-established businesses :      Yes , but restricted
Canadá. Resolución de 16 de mayo de 1994 (further restrictions in 2009)
Israel: Resolución de 23 de enero de 2006.
Japan: Resolución de 10 de septiembre de 1996.
Monaco: Resolución de 24 de marzo de 1994. No obstante, conviene recordar que las operaciones efectuadas con el Principado de Mónaco tendrán la misma consideración que las realizadas con Francia, tal y como delimita el artículo 3.Tres de la LIVA.
Noruega: Resolución de 28 de enero de 2010.
Suiza: Resolución de 23 de septiembre de 1996.

Refund to companies allowed to deduct

VAT returns

Returns must be submitted electronically by taxable persons filing monthly returns, corporations and limited liability companies

VAT return submission frequency : 
Monthly
if turnover exceeded, EUR6,010,121 in the preceding year or if the taxable person is included in the monthly VAT refund procedure,
or,
if the company is included in a VAT group, or if the company applies for ISI/SII scheme
Quarterly : default. Taxable persons can submit quarterly returns, due by 20 April, 20 July, 20 October and 30 January

Annual statement: Yes for all taxable persons, due by 30 January of the following year .

VAT deductible

VAT incurred on business travel is refundable only to the extent the expenses are deductible for income tax purposes (Art. 96 (1) 6. of the VAT Act).

Nil returns

Nil returns are required: When businesses are registered in Spain they have regular obligations. For example, foreign carriers providing occasional passenger transport services in Spain must submit VAT returns for periods in which no taxable transaction occurred.

VAT Payable

Payment of VAT is due by the same date the return must be submitted.

VAT refund

General procedure (quarterly returns):

A refund application is only possible in the last VAT return of the year (30th of January). The authorities have 6 months to qualificate the refund, then late payment interest is due.

Special procedure (monthly returns):

Taxable persons included in the monthly VAT refund scheme and SII, can apply for a refund every month. Authorities have 6 months to decide, before late payment interest apply.

Need a tax representative in Spain?

Let us check the details