Spanish VAT reverse charge

In Spain, the reverse charge mechanism broadly follows EU VAT Directive rules but includes unique domestic extension for specific sectors like construction, real estate, and electronics. These local applications mean Spanish businesses may encounter reverse charge obligations in scenarios not commonly found in other EU countries. Spain’s reverse charge mechanism shifts the VAT reporting and payment responsibility from the supplier to the buyer, reducing the need for foreign suppliers to register for VAT in Spain.

The reverse charge mechanism applies in the following cases:

• A foreign (non-established) supplier sells goods within Spain to a VAT-registered Spanish customer. The buyer reports the VAT.
• A business sends goods from another EU country to a Spanish warehouse and then sells them. The Spanish buyer accounts for the VAT.
• Certain high-risk goods and services that are prone to fraud are always subject to reverse charge, such as:

  • Mobile phones, laptops, video game consoles (above threshold or when sold to resellers)

  • Electricity and natural gas (when the supplier is not established in Spain)

  • Emissions trading, metals, waste and scrap, construction services

  • Certain waste materials including plastics and textiles

The VAT becomes due in the tax period when the supply happens. Usually, this is either when the goods are delivered or the service is completed, or on the invoice date — whichever comes first. If a supplier issues an invoice before the supply takes place, then the invoice date becomes the tax point.

In Spain, certain supplies such as waste, scrap, and raw materials are subject to the reverse charge mechanism. For these transactions, the buyer, not the seller, is responsible for accounting for VAT. The buyer declares and, if eligible, recovers the VAT in the same tax return period, resulting in a cash-neutral effect.