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Your Guide to Spanish VAT: You Need to Know

November 14, 2022

When businesses expand to foreign countries, the VAT concerns and issues grow progressively more complicated, resulting in massive confusion. So, if you're thinking of opening a business in Spain, it is important to learn about the process of Spanish VAT registration.

The Value-Added Tax (VAT) is a kind of sales tax that is implemented in practically every country, with a few notable exceptions. But even those countries employ VAT-like measures, which ensure that all businesses are familiar with VAT.

When Do You Have to Register for Spanish VAT?

After making a taxable supply in Spain, a foreign company is required by law to register for Value Added Tax. Otherwise, foreign companies cannot voluntarily register if they have not engaged in a taxable activity.  

A retroactive registration is feasible; however, fines are imposed for late filing, as well as penalties for late payment if a VAT payment is missed. In Spain, there is no registration minimum. This is applicable to both existing and new enterprises. Any business engaging in taxable activities must register for VAT. 

In Spain, the Agencia de Administración Tributaria handles the implementation of VAT regulations. Typically, a non-resident corporation must get a Spanish VAT number and complete the Spanish VAT registration process. 

The 1st of July 2021: If your sales inside the EU exceed 10,000 EUR, you will be subject to taxation in all countries to which you sell (this is known as the VAT threshold) and the processes that follow will require you to apply for a VAT number in each of these countries. 

A VAT number is known as a Numero de Identificación Fiscal, or NIF, and gaining one is quite easy—it entails submitting an application to the Spanish Tax Office, which will need the assistance of a local agent. 

Even if an enterprise could discover a way to do it without one, the Spanish VAT legislation still needs a local fiscal representative, so acquiring one in advance might save a great deal of headache. As the processes are time-consuming, it may be prudent to begin them early.

Spanish Value Added Tax Rates

The Spanish Tax Authorities have developed four distinct VAT rates, including the standard rate, two reduced rates, and an exemption category. Without delving into specifics, here are examples of each rate:

 

  • 0% VAT-exempt: Tax services supplied by professionals, such as medical services and education services

  • 4% Super Reduced Rate: Basic food and medicine for human consumption

  • 10% Reduced Rate: Public transportation, pet medications, hotel accommodations

  • 21.1 Common or General VAT rate: common taxable products and services, which include water, energy, the Internet, and more.

 For the majority of Amazon purchases, you must pay the usual VAT rate. However, you may be eligible for a reduced rate if you are selling products that fall into a special category. It is advisable to do more research on the VAT status of your items in each market you trade in.

Spanish VAT Registration Documents

Multiple documents are required to register for a VAT ID. It is preferable to collect them in advance to minimize delays in the application procedure. 

  • If available, VAT certificate from VAT IDs you have previously secured from other EU countries.

  • Declaration that your business does not have a permanent presence in Spain

  • Power of Attorney for your local representative or agency in Spain. This may require an apostille or consulate certification.

  • Articles of Incorporation and Memorandum of Organization

  • Your company's extract from the national trade registry 

Note that your Amazon seller certification may be accepted by Spain’s tax office, so the apostille or consulate certification may be waived.

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How to register for VAT in Spain?

If you reach or surpass the delivery threshold  or temporarily keep your products in Spain, you must apply for a Spanish VAT ID. To apply for a Spanish VAT identification number, you must register with your local Administración de la Agencia Estatal de Administración Tributaria office (AEAT). 

You need a local representative to communicate with the Spanish tax office on your behalf. The location of your fiscal agent will determine which AEAT will handle your application.

Fiscal Representation in Spain: We’re Here to Help!

When filing for VAT in Spain, non-EU enterprises are required to choose a Spanish fiscal representative. In contrast to other EU nations, the fiscal representative is not jointly and severally responsible for the company's tax obligations. EU enterprises may register for VAT reasons immediately. 

 

This implies that the company's legal representative may sign the registration form. In reality, however, this may be challenging since the authorities often want the registration form to be signed by a person having a valid Spanish ID. Alternatively, the company's legal agent may get a Spanish ID for foreigners.

 

In Spain, Safari Star offers fiscal representative services. We handle VAT and EORI registrations, VAT returns, Intrastat, and customs procedures. 

Book a free consultation with us if you want to automate your VAT in Spain and if you want us to handle your VAT registrations, returns, correspondence, IOSS services, GST services, RFC services and sales taxes.

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