Spain withdraws VAT local bank payments requirement
- Feb 23, 2021 | Richard Asquith
Non-resident businesses with Spanish VAT registrations will no longer be required to make regular VAT settlements via a Spanish bank account. This will apply to VAT payables from 15 March 2021, and taxpayers will be able to use non-Spanish banks.
Payments direct to Spanish banks permitted
Major Spanish banks will enter into a new procedure for foreign VAT receipts - there will be no requirement to open a bank account with these institutions. Payments will need to be made in Euro's; other currencies will be rejected. And the taxpayer must settle the bank's transfer fees.
The following will need to be included to enter payment details into the tax authorities portal prior to making the transfer: the Spanish VAT identification number (NIF); VAT return number or code; IBAN number of sending account. The portal will then return the account details to send the funds to. This will be different each time, and will not always go to the same bank.
Taxpayers then make the transfer to the bank indicated by the portal. Once the receiving bank has accepted the funds, and it has been successfully reconciled to the outstanding VAT amount, the taxpayer will receive a payment identification code from the Spanish tax portal.
Current Spanish VAT payment regime
Currently, foreign taxpayers may only settle their tax liabilities via an financial institution approved by the tax authorities. This includes most major retail banks. When making the payment, the bank will return a unique NRC (Número de Referencia Completo) code which should be included with the relevant VAT return.
Practically, this has forced most non-resident businesses had to use their Spanish VAT agent as an intermediary on VAT payments.
Still require Spanish VAT agent
The changes do not remove the practical barriers for EU businesses to appoint a local VAT agents. These include:
- need to have a Spanish tax certificate in the authorities' portal to file the return
- requirements to have an 'e-inbox' with the tax office to receive tax notifications.