VAT in Spain – a complete guide.

Do you ship goods to customers in Spain? Check if you should register for Spanish VAT and what the VAT rates are in Spain. Read on.

VAT in Spain - table of contents:

When do you need to register for VAT in Spain?

A company supplying goods or services in Spain may be required to register for Spanish VAT, known locally as IVA – Impuesto sobre el Valor Añadido.

The basic situations in which registration for Spanish VAT is required include:

importing goods into Spain,
purchasing and selling goods within Spain, if the supplier and customers are not Spanish companies registered for VAT,
selling goods to Spanish consumers through the Internet,
storing goods in consignment warehouses in Spain.

How to register for VAT in Spain?

There is no VAT registration threshold for non-resident companies that provide taxable services in Spain.

Foreign companies selling goods online to Spanish consumers must register for Spanish VAT if their turnover to foreign consumers exceeds 10,000 euros.

To obtain a Spanish VAT number, you must submit an application in Spanish, to which you must attach:

VAT certificate to prove that the company is registered for VAT elsewhere in the EU, if applicable,
an extract from the company’s national trade register,
a declaration stating that the company does not have a permanent establishment in Spain,
a power of attorney for the company’s tax representative, which should be notarized.

The application must be submitted to the local tax office of the company’s fiscal representative. Since 2004, EU countries can no longer require foreign companies to appoint a tax representative for VAT purposes. However, Spain still gradually obliges countries to have a fiscal representative who shares the tax liability with the client. The fiscal representative is jointly liable for the taxpayer’s VAT obligations.

VAT declarations in Spain

VAT declarations (monthly or quarterly) must be submitted by, among others, non-resident companies registered for Spanish VAT. Declarations can be submitted:

quarterly – for taxpayers whose sales in the previous year did not exceed 6 million euros,
monthly – for taxpayers whose sales in the previous year exceeded 6 million euros,
annual VAT declarations – for all companies registered as VAT payers in Spain.

Declarations must be submitted by the 20th day of the month following the end of the settlement period (month or quarter).The annual VAT declaration must be submitted by January 30th of the following year.

What should a Spanish invoice include?

Invoices should be issued by the 16th day of the month following the delivery of goods or provision of services. Invoices must be kept for four years. Like all EU countries, Spain allows the use of electronic invoices under certain conditions.

Invoices must include at least the following elements:

invoice issue date,
unique, consecutive number,
supplier and buyer addresses,
description of goods or services provided,
information about discounts,
net value,
VAT rate,
gross amount,
exchange rate of foreign currency – if applicable.

In the case of transactions worth less than 400 euros, simplified invoices can be issued.

“Immediate Supply of Information (SII)

“SII español” stands for “Immediate Supply of Information,” a tax reporting system in Spain that requires certain businesses to electronically submit details of invoices issued and received to the Tax Agency in real-time or shortly after their issuance.

The SII reporting obligation applies to companies:

registered with REDEME (Monthly VAT Return Registry),
with an annual turnover of more than €6 million,
in VAT groups,
VAT taxpayers, and
non-resident entities.

The report should be submitted within four business days from the date of issuance or receipt of the invoice.

Along with the SII report, the following documents must be submitted:

Issued Invoices Ledger,
Supply of Collections for invoices recorded in the Invoices issued ledger,
Received Invoices Ledger,
Supply of Payments for invoices recorded in the Invoices received ledger,
Capital asset ledger,
Specific intra-Community transactions ledger,
Collections in cash ledger.

Tax representative in Spain

The requirement to appoint a tax representative applies to the following entities from outside the EU:

businesses registered for MOSS (Mini One Stop Shop) in Spain,
companies eligible for VAT deduction/filing periodic VAT returns,
companies paying VAT in Spain and wishing to apply for VAT refund.

Companies based in one of the member states may voluntarily opt to use a tax representative, but they are not obligated to do so.

IMPORTANT!

Businesses selling goods online to consumers in Spain, once they exceed 10,000 euros in sales, can register for VAT OSS. They’ll then submit one VAT return covering all EU countries and pay taxes based on the buyer’s country’s rates. This means they don’t have to follow Spanish tax rules, except for using the foreign VAT rate. If they don’t register for VAT OSS, they must follow all Spanish rules, but only for online sales.

VAT rates in Spain

RATE	TYPE	TYPE OF GOODS OR SERVICES
21%	standard	all other taxable goods and services.
10%	reduced	certain foods, water supply, some pharmaceutical products, some medical devices for people with disabilities, national passenger transportation, intra-Community and international road, rail and inland waterway transport, some social housing, some renovations and repairs of private residential buildings, agricultural deliveries, accommodation in hotels, restaurant and catering services, some social services, household waste disposal, some non-alcoholic beverages, bars, cafes, nightclubs, and alcoholic beverages sold there, takeaway food, cut flowers and plants for food production, some deliveries of new buildings, some construction work related to new buildings, admission to sports events (only amateur sports events), waste and sewage disposal, admission to some cultural events.
4%	reduced	some foods, some pharmaceutical products, some medical devices for the disabled, some books (excluding e-books), some newspapers and magazines, some social housing, some social services, some construction work related to new buildings, some home care services.
0%	zero	some gold coins and bars, intra-Community and international air and sea transportation.

The VAT rates in Cyprus are quite similar – read more about the Cypriot VAT system.

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Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
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