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VAT reverse charge in Spain

  • Sep 16, 2011 | Richard Asquith

VAT reverse charge in Spain

As one of the most complex VAT regimes, the Spanish VAT system contains many irregularities to the EU VAT system. In particular, the rules around simplification or reverse charge of the VAT compliance is complex. Below are some clarification notes.

The general EU VAT rule is that the taxable person (that is the person that has to charge VAT) is the entity that provides the service or supplies the goods.

Spanish derogation from VAT Directive

However, in Spain, and many EU countries as for instance the Netherlands, when goods are being sold by a non resident entity to a Spanish established entity, understood as a Spanish legal entity, the reverse charge rule applies. Please note, that when a non resident sells goods to another non resident, the reverse charge rule would also apply if it is proven that it is a legal registered entity at his home country.

Likewise, this reverse charge rule does not apply in the following cases:

  • When the services rendered fall within article 69.1 of the Spanish VAT law. That means if the acquirer is also non established and the General location rule for services applies (where the acquirer is based).
  • When goods are being supplied as an EC Sale or the goods sold are subject to Special Taxes such as alcohol tax, tobacco tax, electricity tax, gas tax etcetera...
  • When the Supply of goods is VAT exempt.

Finally, regarding supply of gold, metals such as Niquel and rubbish or junk, specific rules apply that would have to be looked into.  You can read more about the Spanish reverse charge here.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara