In Spain, Value Added Tax (VAT), or Impuesto sobre el Valor Añadido (IVA) in Spanish, was introduced as of 1 January 1996. The Spanish VAT legislation – known as LIVA (Law 37/1992 of 28 December) went through several amendments aiming to align it with the EU VAT Legislation.
The State Tax Agency (AEAT) is responsible for collection, management and inspection of VAT.
Reduced Rates: 4% and 10%
The reduced rate of 4% applies to basic food staff, pharmaceutical products for humans, certain goods and services for handicapped persons, as well as to books and similar printing materials.
The reduced rate of 10% applies to, among other things, to food and drink for human or animal consumption, hotel and catering services, passenger transport, cultural services, such as concerts, theatres, cinemas, museums, certain pharmaceutical products and medical equipment and devices, etc.
A temporary reduced rate of 5% was introduced for the period 1 July 2022 to 31 December 2022 that applies under certain conditions to the supplies, imports and intra-Community acquisitions of electric energy by holders of electricity supply contracts
In Spain, there is no VAT registration threshold for both residents and non-resident taxable persons, therefore where a taxable person provides taxable supplies in Spain, the company is required to register for VAT in Spain prior their first supply.
The Spanish VAT Act allows for a few different types of registrations for VAT :
Once the VAT registration is finalised, a Fiscal Identification Number (NIF) is granted. The code the VAT number starts with depends on the category of taxpayer to which it is issued.
Normally the NIF received by the taxable person after registration is active only for domestic transactions. If the taxable person has intra-community transactions (such as intra-community acquisitions and/or intra-community supplies of goods and/or services) application for inclusion in VIES system should be submitted. Once the taxable person is included in the VIES system, they are provided with Intra-community VAT number which is composed by their NIF and ES before it. This VAT number will only then appear as active when checked on the VIES validation website provided by the EU Commission.
VAT liability applies to the following transactions:
In Spain taxable persons are required to issue invoices with the certain disclosure details which are contained in the Spanish VAT Act, for the supplies of goods and services taxable in Spain as per the place of supply rules. For certain financial transactions there is no obligation to issue VAT invoice. Issuing simplified VAT invoice is permitted for amounts not exceeding €400 (including VAT) or €3000 (including VAT) where the transaction relates certain sector described in the legislation, such as retail sales, door to door sales, restaurants, passenger transports etc. Furthermore, there is a possibility to issue a credit note which shall be cross-referenced to the original invoice, in order to reduce VAT charged and reclaimed on a supply.
Record retention period and statute of limitation period
As per the provisions of the Spanish VAT Act, invoices should be retained 4 years for VAT purposes. As per the commercial law the retention period is 6 years.
Where a taxable person makes intra-community supply or acquisition of goods or services, these should be reported in recapitulative statement. Recapitulative statement is due on 20th of the month following the reporting period and should be submitted monthly or quarterly if the amount of the intracommunity supplies of goods or services of the taxable person in the current and in the previous 4 quarters is less than €50 000.
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From the 1st of July 2021, the OSS applies to local businesses which supplies B2C services outside Spain and making distance sales of goods within the EU and other domestic supplies of goods in other Member States. Additionally, the OSS contains two kinds of schemes: the Union Scheme and the Non-Union Scheme.
Moreover, the Import One Stop Shop (IOSS) is accessible to EU established suppliers, to non-EU established suppliers with an EU-established intermediary, to suppliers established in countries with an agreement on mutual assistance with the EU and related electronic interfaces. The IOSS applies to import goods, not subject to excise duty, in consignments of an intrinsic value of less than 150 Euros into a Member State with a view to selling them to EU buyers.
Taxable person having intra-community supplies of goods or services over certain annual threshold should submit intrastate declarations respectively for dispatches or arrivals. The current Intrastat threshold in Spain is €400 000 for every dispatch and arrival.
The deadline for submission is the 12th day of the month following the declaration period. Intrastat declarations should be filed by the liable taxable persons even when there is no data to be reported for the relevant month.
Taxable persons established outside the EU are required to appoint fiscal representative. A fiscal representative I general acts for and on behalf of the non-resident, but he is not liable for the fulfilling of all tax obligations of the non-EU taxable person he represents.
A non-EU taxable person is not required to appoint a VAT representative if applying the OSS scheme for services.
Depending on their turnover in Spain taxable persons are required to submit monthly or quarterly VAT returns. Taxable persons with turnover over EUR 6,010,121 in the previous year must file their VAT returns on a monthly basis, as well as those participating in the monthly VAT refund census. The due date of submission of monthly VAT returns is 20th of the month following the reporting period. The rest of the taxpayers should submit VAT returns and pay their VAT liability on quarterly basis where the deadline for submission of the return is 20th of the month following the reporting period, except for the VAT return for the last quarter of the year the submission deadline for which is 30th of January of the following year.
In addition to the periodical VAT returns in Spain there is an annual summary VAT return which is to be submitted by 30th of January of the year following the reporting period.
There is an additional obligation in Spain – Immediate Supply of Information (SII) that applies to monthly taxpayers. Monthly taxpayers are required to provide electronically information on their invoices issued and received respectively within 4 calendar days from the date of issue or 4 calendar days from the date the purchase invoices are booked.
Corporations and limited liability companies as well as any taxable persons submitting VAT returns in monthly basis required to file their VAT return and SII data electronically using an advanced electronic signature.
In July 2017, the Spanish VAT Authorities introduced Suministro Inmediato de Información (SII); the “Immediate Supply of Information”. This real-time reporting requirement has been used to mandate the electronic supply of accounting information to the Spanish VAT Authorities.
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