Spain introduced Value Added Tax (VAT) in 1986 when it became a member of the European Union (EU). It has incorporated the EU VAT Directives into local Spanish VAT Laws, Regulations and Instructions. This covers the details of Spanish VAT registrations, compliance and returns. VAT in Spain is overseen by the Agencia Estatal de Administración Tributaria.
Any company making taxable supplies of goods or services may be required to charge VAT. This first requires a Spanish VAT registration.
Should you register for Spanish VAT?
Spain follows the broad EU VAT rules on the requirement for foreign companies to register for local VAT. There are a number of differences, particularly the use of the reverse charge. The principle situations where a registration is required:
- Importing goods into Spain, including if there is an immediate onward supply to another EU country
- Buying and selling goods within Spain if the supplier and customers are not Spanish company with a VAT registration (reverse charge applies)
- Selling goods to Spanish consumers over the internet, subject to the Spanish distance selling VAT registration threshold
- Holding goods in a consignment warehouse in Spain, and therefore deemed holding a permanent establishment
- Charging admission fees to live events or exhibitions in Spain
Since the 2010 EU VAT Package, there are almost no circumstances where a non-resident VAT registration is required for providing services in Spain. Instead, the Spanish customer records the transaction under the reverse charge mechanism.
Note that providers of electronic, broadcast or telecoms services to consumers in Spain only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.
Our briefing on Spanish VAT Registrations explains the details of the registration process, including the local VAT registration threshold.
Need help with your Spanish VAT compliance?
Researching Spanish VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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