Spanish VAT reverse charge

The reverse charge mechanism is designed to reduce the frequency with which companies trading across Europe must VAT register. It works across the EU. Spain uses the reverse charge system less than most other EU states.

It allows any transactions to be recorded through the VAT return of the customer, so alleviating the need for the foreign supplier to VAT register in Spain.

When is the Spanish VAT reverse charge used?

The reverse charge mechanism is applied in the following circumstances:

  • Buying and selling goods in Spain if the original supplier and customer are Spanish VAT registered
  • The supply of services to a Spanish VAT registered business (2010 VAT package).
  • Supply of certain types of power.
  • Other various minor goods.

What is the tax point for the Spanish reverse charge?

The tax point (when the VAT is due) for the reverse charge is the end of the month following the month of supply. However, if the vendor raised an invoice prior to the supply, then it is that date which should be used.

Need a fiscal representative in Spain?

Non-EU businesses selling in Spain will need to appoint a fiscal representative alongside completing VAT registration and returns.
Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients.
Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.

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.