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Spain has a value-added tax (VAT) system known as "Impuesto sobre el Valor Añadido (IVA) '' with a standard rate of 21% and reduced rates of 10% and 4% for certain goods and services.

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Fiscal representation in Spain

The fiscal representative is responsible for ensuring that the non-resident company complies with all Spanish VAT rules and regulations, including the submission of VAT returns and payment of VAT, as well as representing the non-resident company in any tax-related matters or disputes.

In general, a fiscal representative is required when a non-resident company has no permanent establishment or fixed place of business in Spain.

The NIF (Número de Identificación Fiscal) is the tax identification number used in Spain for various tax-related purposes, including VAT registration. For VAT registration in Spain, businesses are assigned a specific VAT identification number called the NIF-IVA (Número de Identificación Fiscal).

Spanish VAT reverse charge

In Spain, Article 196 of the VAT Directive (Directive 2006/112/EC) pertains to the reverse charge mechanism for certain services provided by a non-resident supplier to a VAT-registered business in another EU member state. This article allows for the reverse charge to be applied, shifting the responsibility for reporting and paying the VAT from the supplier to the recipient of the services.

- Spanish reverse charge on B2B Services

Scope of Application: The reverse charge on B2B services generally applies when services are provided by a non-resident supplier to a VAT-registered business in Spain.

-Domestic reverse charge is mandatory when non-established companies sell goods B2B in Spain

When a non-established company, meaning a company without a fixed establishment or permanent establishment in Spain, sells goods to another VAT-registered business in Spain, the domestic reverse charge mechanism may apply.

Frequency of Spanish VAT returns

  • Monthly Returns: Businesses with an annual turnover exceeding €6,010,121.04 are required to file monthly VAT returns.

  • Quarterly Returns: Businesses with an annual turnover equal to or less than €6,010,121.04 but exceeding €600,000 are typically required to file quarterly VAT returns. However, certain businesses may also opt for monthly returns voluntarily.

  • Annual Returns: Businesses with an annual turnover less than or equal to €600,000 are generally eligible to file annual VAT returns. This option is available for small businesses and self-employed individuals meeting specific criteria.

Spanish VAT compliance - What Global Trade can help you with ?

  • VAT Registration: Businesses meeting the threshold for VAT registration must register with the Spanish tax authorities to obtain a VAT number. This enables them to charge, collect, and remit VAT on their taxable supplies.

  • VAT Rates and Invoicing: Businesses must correctly apply the appropriate VAT rates to their goods or services and issue valid VAT invoices to customers. Invoices should contain specific information required by Spanish VAT regulations.

  • VAT Reporting and Returns: Businesses are responsible for submitting regular VAT returns to the tax authorities, reporting their VAT liabilities and input tax credits. Returns must be filed within the prescribed deadlines and reflect accurate calculations.

  • Intrastat Reporting: If a business exceeds the threshold for intra-EU trade, they may be required to submit regular Intrastat returns. Intrastat reports provide statistical information on the movement of goods between EU member states.

  • Reverse Charge Mechanism: Businesses should understand and apply the reverse charge mechanism correctly in specific situations where the recipient is responsible for reporting and paying the VAT instead of the supplier.

  • VAT Compliance Documentation: It is important to maintain proper records and documentation to support VAT transactions, including invoices, VAT certificates, and relevant business documents.

  • Compliance with VAT Rules and Regulations: Businesses should stay updated with any changes or updates to Spanish VAT legislation and ensure compliance with all applicable rules and regulations.

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