Every citizen of the European Union – including Spain – is required to pay VAT. It is applicable especially to those doing business in the country or selling goods and services to Spanish consumers. It is crucial to understand the current VAT in Spain regulations to avoid potential penalties for non-compliance.
Foreign businesses operating in Spain may be required to register as VAT taxpayers. This number allows them to file VAT returns in Spain and account for VAT. The process of registering for VAT in Spain itself can seem complex to many, and may require the assistance of a tax representative. Read the following article to prepare for your interview with a tax specialist.
What are the VAT rates in Spain?
When doing business in Spain, you will encounter four different rates of value added tax. The standard VAT rate in Spain is 21%. In addition, there is a reduced VAT rate of 10%, as well as two super reduced rates – 4% and 0%. If you want to find out what types of goods you can apply each VAT rate to, go to https://polishtax.com/vat-in-spain-brief-introduction/.
VAT registration in Spain – when is it required?
Registration for VAT in Spain – as in other EU countries – should take place when you are:
- importing goods to Spain,
- purchasing and selling goods and services on the territory of Spain,
- selling goods and services from other EU countries to Spanish consumers,
- storing goods in Spain.
In addition, as in other EU member countries, businesses should register for VAT in Spain and settle sales locally once they exceeded intra-Community distance sales threshold of €10,000, starting with the transaction that reached the limit. As an alternative to skipping local registration, as a taxpayer, you can opt for the VAT OSS procedure, which allows you collectively account for sales in the EU.
How to register for VAT in Spain?
Non-EU entrepreneurs who wish to become VAT taxpayers in Spain must use a tax attorney to complete the VAT registration process. A tax attorney is authorized to represent the company before the Administración de la Agencia Estatál de Administración Tributaria (AEAT), the authority responsible for VAT registration and settlement in Spain.
What documents must be submitted when registering for VAT in Spain?
In order to obtain a VAT number and go through the VAT registration process in Spain, you must submit additional documents in addition to the registration application. These include:
- a copy of the incorporation or association articles,
- an apostille and a pre-approved copy of your ID, certified by a notary and a court,
- confirmation of EU VAT registration and registration in the company registry.
Important! The Articles of Incorporation and the confirmation of registration in the Companies Registry must be translated into Spanish.
VAT law in Spain is governed by both European Union regulations and national legislation. However, it should be noted that the EU sets the rules under which national authorities operate, allowing them to establish their own specific VAT regulations. As a result, some aspects, such as document requirements, may vary from country to country. Therefore, it is important to use an experienced tax advisor.
