10 September 2012
Spanish Value Added Tax registrations and VAT returns are based on legislation which is derived from the European Union, which sets the common VAT compliance rules across the whole EU. The Spanish VAT rate is 21% since 1 September 2012, and is set by the Spanish government.
The European VAT Directives lay out the rules for VAT invoices, computations and most of the details for the implementation of VAT across the 27 Member states. Spain is obliged to incorporate the VAT Directive into its tax code.
Click here if you would like free guidance on Spanish VAT compliance - including fiscal representation
SPAIN VAT Law
The Spanish VAT law is contained within the General Tax Code. It is administered by the Agencia de Administración Tributaria (the Spanish Revenue or AEAT).
SPANISH VAT Registration
Foreign companies may register in Spain for VAT without the need to form a local company – known as non-resident VAT trading. There is no VAT threshold in Spain for the registration of non-resident traders – a VAT number must be in place before the commencement of taxable supplies.
There are strict rules on the situations where a registration is permitted. Common scenarios which require a Spanish VAT registration include:
- Importing goods into Spain;
- Organising live events, conferences etc in Spain;
- Holding goods in a warehouse in Spain as stock for resale;
- 'Supply and install' services over 12 months;
- Selling goods from Spain to other EU countries; and
- Distance selling to private individuals in Spain, e.g. internet retailing.
Registering for Spanish VAT generally takes 1-2 weeks, although this can vary.
SPANISH VAT Compliance
There are detailed rules controlling the recording and processing of Spanish transactions. These include guidelines on:
- Spanish invoice requirements;
- Foreign currency reporting and translation;
- Correcting errors from prior returns;
- Credit notes and corrections; and
- What accounting records must be maintained.
SPANISH VAT Rates
The standard VAT rate in Spain is 21% (since Sept 2012) and rose from 18% on 1 Sept 2012. There is a reduced rate of 10% (from Sept 2012) for: passenger transport; hotel and restaurant services; and other. There is also a 4% VAT rate for: food and drink; goods from chemists; construction work; and some newspapers.
There are many variations to the rates above, including exempt taxable supplies. Please contact us to learn more:
SPANISH VAT Returns
Companies with a Spanish VAT number must submit periodic returns detailing all taxable supplies (sales) and inputs (costs). Generally, returns are submitted quarterly in Spain. VAT returns in Spain are due by the 20th of the month following the reporting period.
There is also a requirement to submit an annual return in Spain by the end of January the following year.
SPANISH Intrastat and EC Sales Lists
In addition to VAT returns in Spain, companies may be required to submit additional statistical information.
The Spanish Intrastat, which lists sales (dispatches) and purchases (acquisitions), within the EU region, must be filed monthly once the annual threshold is exceeded. Spanish EC Sales Lists, or recapitulative statement, details customers and the values of sales made to them. It should be submitted on a quarterly basis, and there is no threshold for reporting.
SPANISH VAT Refunds
If a foreign company is providing taxable supplies in Spain, but unable to obtain a Spanish VAT number, or simply incurring Spanish VAT on local goods or services, then Spanish VAT may be recovered through a VAT reclaim.
From the 1st of January 2010, VAT refund applications are made through the Tax Authorities of the applicant’s home country.
For more details, click here to read about our VAT Recovery service.
To talk about our Spanish VAT services, enquiries should contact TMF’s UK office, which co-ordinates TMF's European VAT services. TMF has offices in Barcelona and Madrid.
+44 (0)870 067 8881