Madrid GMT +1
EY
Calle Raimundo Fernández Villaverde, 63-65 Torre Azca 28003 Madrid Spain
Indirect tax contacts
Eduardo Verdún +34 915-727-421 eduardo.verdunfraile@es.ey.com
Fulgencio García + 34 915-727-658 fulgencio.garcia@es.ey.com
Silvia Bermudo +34 915-727-749 silvia.bermudoconde@es.ey.com
Barcelona GMT +1
EY
Avda. de Sarriá, 102-106 Edificio Sarriá Fórum 08017 Barcelona Spain
Indirect tax contacts
María Lorente +34 933-663-763 maria.lorentelranzo@es.ey.com
Íñigo Hernández +34 933- 666-537 Inigo.HernandezzMoneo@es.ey.com
Sevilla GMT +1
EY
Avenida de la Palmera, 33 41013 Sevilla Spain
Indirect tax contacts
Pedro Gonzalez-Gaggero
+34 915-727-419 pedro.gonzalez-gaggero@es.ey.com
María José Giménez +34 954-665-227 mariajose.gimenezvillalba@es.ey.com
Navarra GMT +1
EY
Avenida de Pío XII, 22 31008 Pamplona Spain
Indirect tax contact
Alberto Arteaga +34 948-179-357 alberto.arteagafernandez@es.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Impuesto sobre el Valor Añadido (IVA)
Date introduced 1 January 1986
Trading bloc membership European Union (EU)
Administered by Ministry of Finance (http://www.aeat.es and http:// www.hacienda.gob.es )
VAT rates
Standard 21% Reduced 4%, 10% Other Exempt and exempt with credit
VAT number format
A – 1 2 3 4 5 6 7 8 or B – 1 2
6
N
VAT return periods
1 2 3
7
C or W – 1 2 3 4 5 6 7 C (in case of permanent establishment) (ES prefix must be added if the taxable person is included in the VAT Information Exchange System [VIES] census)
Monthly (if turnover exceeded EUR6,010,121.04 in the preceding year or if the taxable person is included in the monthly VAT refund procedure or if the company is included in a VAT group or if the company applies for ISI system)
Quarterly
Annual statement (required for taxable persons not applying ISI system)
Thresholds Registration
Established None Non-established None
Distance selling EUR10,000 Intra-Community acquisitions None
Electronically supplied services EUR10,000
Recovery of VAT by non-established businesses Yes (under certain conditions)
B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods or services made in Spain by a taxable person
• The intra-Community acquisition of goods from another European Union (EU) Member State by a taxable person (see the chapter on the EU)
• The importation of goods from outside the EU, regardless of the status of the importer
• Reverse charge on goods and services received by a taxable person in Spain
For VAT purposes, the territory of Spain excludes the Canary Islands, Ceuta and Melilla.
Quick Fixes. Pending introduction of a “definitive” system for the VAT treatment of intra-Commu nity supplies of goods to taxable persons, the EU has adopted Quick Fixes for intra-Community trade in goods. For an overview of the Quick Fixes rules, see the chapter on the EU.
The Quick Fixes were transposed into the Spanish legislation through the Royal Decree-law 3/2020 of 4 February 2020.The Quick Fixes are four specific measures that intend to solve in the
short-term period some problems related to the implementation of VAT. These measures are related to (i) call-off stocks, (ii) chain transactions, (iii) proof of transport and (iv) the VAT num ber of the recipient of an intra-EU delivery of goods. Conversely to the measure related to the proof of transport, which was implemented on 1 January 2020, the other three measures were enforced on 1 March 2020.
Call-off stock. Sales of consignment goods or agreements to reserve stock (“call-off stock”), refer to a situation where the supplier sends goods from one Member State to another (e.g., to Spain), for storage (warehouse) and subsequent pick-up by the customer (entrepreneur) in accordance to its needs.
Before the Quick Fixes, a transaction treated as an intra-Community supply of goods (“transfer”) in the Member State of departure of the goods and, at the same time, a transaction treated as an intra-Community acquisition of goods in the Member State of arrival, would both be carried out by the supplier. Now as a result of the application of Quick Fixes simplification, it becomes an exempt intra-Community supply of goods in the Member State of departure carried out by the supplier and an intra-Community acquisition of goods in the Member State of arrival made by the customer.
The application of the simplification implies that the supplier would no longer be obliged to be registered in Spain.
Requirements for the application of the simplification:
• The supplier and customer must be taxable persons
• The supplier must not be established in the Member State of arrival
• The customer must be VAT registered in the Member State of arrival
• The simplification applies to goods that are transported from one Member State to another, by the supplier or on their behalf
• The goods must be called-off or returned to the Member State of dispatch within 12 months of arrival
• The customer’s identity and VAT number must be known by the supplier at the time when transport begins
• The transport and supplies must be recorded in a register by the supplier
• The arrival and acquisitions must be recorded in a register by the customer
• The identity and VAT number of the intended customer must be recorded in the EC Sales List (VIES) by the supplier. VIES returns should be submitted in line with EU VAT regulations when the stock is called off.
Chain transactions. This measure intends to simplify the situation where goods are subject to several deliveries, but they are transported from the first member of the chain to the last one, from one Member State to another. The implementation of this Quick Fix provides clarification regarding which of the parties to the transaction will be able to apply for the exemption in the intra-EU delivery of goods, i.e., which of them will be considered to perform the transportation of goods.
To determine the operation that shall be considered the VAT exempt intra-EU supply of goods in chain transactions, the following rules to allocate the intra-EU transport should be taken into account:
• As a general rule, it shall be considered that the intra-EU transport is linked to the supply performed by the first supplier (A) to the intermediary (B) – A will be the party performing the VAT exempt intra-EU supply.
• However, if B communicates to A a Spanish VAT ID number, the transport will be linked to the supply performed by B and the supply A-B will be a domestic supply – B will be considered the party performing the VAT exempt intra-EU supply to party C.
VAT number of the recipient of an intra-EU delivery of goods. As per the implementation of this Quick Fix, to consider an intra-EU supply of goods exempt, the following requirements should be met:
• The goods should be transported to another Member State
• The recipient of the goods should have a VAT number granted by the authorities of a Member State other than Spain and must communicate it to the seller
• The supplier should include the VAT number of the recipient in its EU sales list (Form 349)
Proof of transportation. The Spanish VAT Regulation envisages that any means of evidence admit ted by law is valid (principle of freedom of evidence). Particularly, the means of evidence envis aged in Article 45 of the Council Implementing Regulation 282/2011 (there is a direct reference of the Spanish VAT Regulation). The Spanish VAT law does not specify any other document. As per the principle of freedom of evidence, any type of document that provides enough evidence of such transport will be acceptable. However, it would be advisable to use the documents established in the EU Regulation, since these will be presumed as valid, providing legal certainty. Also means of evidence different from the above, could draw the attention of the authorities and even their reluctance to accept them.
Consequently, according to the EU Regulation to apply for the exemption in the intra-EU deliv ery of goods, the transport should be proven by the following means:
• If the transport is carried out by the vendor, it should have at least two noncontradictory means of proof from the list below
• If the transport is carried out by the acquirer, the vendor should have (i) a statement whereby the acquirer certifies the transport of the goods and (ii) at least two noncontradictory means of proof from the list below
The allowed means of proofs are the following:
• Documents related to the delivery of the goods, such as, CMR, bill of lading, freight invoice or an invoice of the carrier
• An insurance policy or any bank document that proves the payment of the transportation
• Documents issued by public bodies that certificate the arrival of the goods in the destination Member State
• Receipt from the depositary of the goods in the destination Member State
Effective use and enjoyment. To avoid instances of nontaxation or double taxation, EU Member States can apply use and enjoyment rules that allow a service that is “used and enjoyed” in the EU to be taxed or prevent a service that is “used and enjoyed” outside the EU from being taxed. If a service is taxed in the EU under the use and enjoyment provisions, a non-EU supplier of the service may be required to register for VAT in every Member State where it has customers that are not taxable persons. For information regarding the rules relating to VAT registration, see the chapters on the respective countries of the EU.
The Spanish VAT law envisages that certain services that following the general business-tobusiness (B2B) place of supply rule are in principle placed outside the European Union (i.e., because the recipient is a non-EU entity), should be subject to Spanish VAT if their effective utilization or exploitation were to take place within the Spanish VAT territory.
The following three conditions must be met for this special rule to apply.
1) The service is included in the list. The services within the scope of this special rule are exclu sively those listed in the VAT law, which includes, among others, the following:
(a) B2B intermediation services in the name and on behalf of the recipient
(b) Advertisement services
(c) Advisory, engineering, consultancy, legal, tax, accountancy and other similar services
(d) Data processing services and the provision of information, including commercial behav iors and procedures
(e) Electronic services, telecommunications, broadcast and television services
Even the list of services falling in the scope of this special rule is a close list, the list includes very general concepts without describing in detail the kind of services covered by each category of services. In this regard and considering the evolution of the criteria of the Spanish General Directorate of Taxes (GDT, Spanish administrative body in charge of setting the administrative interpretation of the Spanish tax provisions), it is noticeable that an extensive interpretation of the services is subject to the use and enjoyment rule.
2) The recipient of the services is a non-EU entity. Based on the general place of supply rule for B2B services, the service is deemed to be placed outside the EU because the recipient is a non-EU established entity.
3) The effective use and enjoyment of the services takes place within the Spanish VAT territory.
The relevant services must be effectively used or exploited from an economic perspective in the Spanish VAT territory.
The above three conditions must be assessed on a case-by-case basis. The Spanish VAT law does not include further guidelines regarding the application of this use and enjoyment provision. As a consequence, it is highly remarkable that the application of this rule is not a clearcut issue, as it fully depends on the facts and circumstances involving each specific case.
Transfer of a going concern. In accordance with Article 7.1 of the Spanish VAT law, a transaction consisting of a transfer of going concern (TOGC) will not be subject to VAT provided that certain requirements are met: “Not subject to Spanish VAT will be the transfer of a group of tangible and, if applicable, intangible elements which, comprising the taxable person’s business or professional assets, constitute an autonomous economic unit for the transferor, capable of developing a busi ness or professional activity by itself, regardless of the tax regime applicable for other taxes pur poses and for paragraph four of Article 4 of this law.”
In this regard, the GDT has further defined, based on the Court of Justice of the European Union’s criteria, that to consider a TOGC as not subject for VAT it is not necessary that all assets and liabilities of a whole company are transferred, but that the elements transferred are indeed capable of developing a business or a professional activity, as an autonomous unit.
The main requirements to determine whether or not the TOGC relief would apply could be sum marized as follows:
• The assets transferred must constitute an autonomous economic unit for the transferor
• The economic autonomous unit must be capable of developing an economic activity by its owns means
• The assets/liabilities transferred must include a minimum organizational structure in terms of material and/or human resources
• The acquirer should affect or intend to affect said assets/liabilities transferred to the performance of a business activity
C. Who is liable
A “taxable person” is any business entity or individual that makes taxable supplies of goods or services, intra-Community acquisitions, imports or distance sales in the course of a business in Spain.
No VAT registration threshold applies in Spain. A taxable person that begins its activity must notify the VAT authorities of its liability to register before the beginning of its activities.
Exemption from registration. Exemption from VAT registration in Spain is allowed for the following legal or individual bodies:
• Taxable persons who only carry out transactions that do not give right to the total or partial VAT deduction (e.g., exempt supplies – cultural, medical, financial transactions) or taxable persons who carry out transactions that are subject to the agriculture, livestock and fishing special scheme, or legal persons that do not carry out transactions as professionals or entrepreneurs, when the intra-EU acquisitions of goods carried out by the mentioned legal persons are not sub ject to VAT
• Bodies that do not act as professionals or entrepreneurs that carry out intra-EU acquisitions of new means of transport
• Bodies that occasionally carry out VAT exempt supplies of new means of transport
• Professionals or entrepreneurs not established in the Spanish VAT territory who only perform in Spain transactions for which they are not considered to be a taxable person
• Professionals or entrepreneurs not established in the Spanish VAT territory who only carry out supplies in Spain of intra-EU acquisitions of goods and subsequent supplies of those goods
In addition to the above, it is important to note that there are two types of VAT registrations in Spain: the limited VAT registration and the full VAT registration.
The limited VAT registration applies in cases where nonresident entities need a VAT number for the purpose of carrying out intra-EU acquisitions of goods or deemed intra-EU acquisition of goods or imports of goods. However, they are not deemed as taxable persons in respect of sub sequent supplies of those goods performed within Spain (since, for instance, the reverse charge applies to the ongoing local supplies of those goods).
The full VAT registration under the general taxable person regime is needed when the nonresident entity is going to perform transactions in Spain, for which it is considered to be a taxable person, such as domestic supplies where output tax should be charged; exports of goods or intra-EU supplies of goods.
Voluntary registration and small businesses. The VAT law in Spain does not contain any provision for voluntary VAT registration or special rules for small businesses, as there is no registration threshold (i.e., all entities that make taxable supplies are obliged to register for VAT in the terms described above).
Group registration. VAT grouping is allowed under Spanish VAT law. Notwithstanding this rule, companies that belong to a VAT group must still register for VAT purposes individually. This is such that the VAT group will be assigned by a Spanish tax ID number and, in addition, each entity belonging to the group will have its own Spanish tax ID number.
A VAT group should have a parent company and subsidiaries should have at least 50% participa tion by the parent company.
The minimum time period required for the duration of a VAT group is three years.
All members of a VAT group in Spain are jointly and severally liable for VAT debts and penalties.
Holding companies. As a general rule, pure holding companies (i.e., those that solely acquire and hold shares of their subsidiaries, without carrying out any economic activity or involving themselves in the management of such subsidiaries) are not entitled to deduct and, hence, to recover the input tax borne, to the extent that they do not have the status of a taxable person.
However, if a holding company carries out an entrepreneurial activity, it could recover the Spanish input tax borne on those expenses exclusively used for the purposes of its business activ ity. Nevertheless, the fact that a holding company has mixed activities would not automatically imply that it would be entitled to deduct its input tax on a 100% basis, insofar as it would be necessary that such input tax is allocated to transactions that grant the taxable person the right to deduct it.
To be part of a VAT group, it is necessary to be a business or professional, so a pure holding company could not be part of the VAT group. However, the fact that a holding company performs management support services for other entities of the group, could lead to a mixed holding company, and therefore this holding company could be part of the VAT group.
Cost-sharing exemption. The VAT cost-sharing exemption (in accordance with VAT Directive 2006/112/EEC Article 132(1)(f)) has been implemented in Spain. This provides an option to exempt support services that the cost-sharing group supplies to its members, providing certain conditions are met (in accordance with specific requirements laid out in Spanish VAT law).
Among other requisites, those services should be used directly and exclusively in the abovemen tioned activity and they should be necessary. The members are limited to the reimbursement of the share of joint expenses.
Fixed establishment. A foreign business is deemed to have a fixed establishment for VAT pur poses in Spain in the following circumstances:
• The place of management, branch, office, factory, workshop, installation, store, shop and, in general, any agent or representative empowered to conclude contracts on behalf and for account of the entrepreneur
• A mine, quarry, slag heap, oil or gas well, or any other place for extraction of natural resources
• A construction, installation or assembly project carried out by the entrepreneur and whose duration exceeds 12 months, among others
The GDT has issued several binding rulings (V1479-14, V3311-15 and V3311-17) according to which a VAT fixed establishment is deemed to exist if the following requirements are met:
• Have a necessary minimum structure in another Member State different from the one in which it is considered as a resident (fixed place of business)
• This minimum structure implies having a minimum organization, understood as material and human resources factors that may imply a certain division of the work
• Permanence in time of the fixed place of business
• Autonomy of the VAT fixed establishment in the activities carried out, different from the head office; it should imply a certain capacity of decision in the management of the administrative activities that should be performed
Non-established businesses. A non-established business that makes supplies of goods or services in Spain must register for VAT if it is liable to account for Spanish VAT on the supply.
Tax representatives. A non-established business must register in Spain for VAT purposes if it makes any of the following supplies:
• Intra-Community supplies or acquisitions
• Distance sales in excess of the threshold unless the EU One-Stop-Shop (OSS) system applies
• Supplies of goods and services that are not subject to the reverse-charge mechanism
• Exports
In general, non-established taxpayers must appoint a tax representative in Spain.
Taxable persons established in the EU, foreign companies established in the Canary Islands, Ceuta or Melilla, and foreign companies established in a country that has a mutual assistance agreement with Spain are exempt from the above general rule. However, in practice, the tax authorities require the appointment of a VAT representative even for companies established in the EU because it is mandatory to have a Spanish address where communications issued by the tax authorities can be easily received. This means that the foreign entities need to request a specific digital certificate to access to its notifications or appoint a local representative to receive the notifications on a company’s behalf.
A fiscal representative is no longer compulsory when an EU company is going to be registered for VAT in Spain. However, a fiscal representative is required for non-EU companies. The fiscal representative must be tax registered and willing to act as the local tax representative of the com pany, managing queries and filing obligations of the company for dealings with the tax authorities.
Reverse charge. The reverse-charge mechanism generally applies to supplies made by non-established businesses to taxable persons. Under this mechanism, the taxable person is the recipient of the goods or services supplied.
If a foreign taxable person supplies goods to a company established in Spain, the recipient of the supply becomes liable for VAT purposes. However, the reverse-charge mechanism does not apply to certain items, including the following:
• Distance sales
• Exempt exports
• Exempt intra-Community supplies
The reverse-charge mechanism also applies if a foreign taxable person supplies goods in Spain to another foreign taxable person.
If a foreign taxable person supplies services to a company established in Spain, the company established in Spain is treated as the taxpayer.
If a foreign taxable person supplies services subject to Spanish VAT to another foreign taxable person, in general, the supplier is liable for the VAT due.
Domestic reverse charge. Apart from the cases described above, the reverse charge also applies to the following domestic transactions in Spain:
• Supplies of certain kinds of gold and gold-processed products, silver, platinum and palladium
• Supplies of certain wastes from iron, paper or glass industries
• Supplies of services related to rights on greenhouse gases
• Supplies of immovable property on the frame of insolvency proceedings, warranty executions or exempt supplies of immovable property when the exemption is waived
• Work executions
• Supplies mobile phones, video game consoles, tablets and laptops
Digital economy. Specific VAT rules apply to cross-border supplies of goods and services sold via the internet (e-commerce) in all EU Member States with effect from 1 July 2021. These new rules apply to all direct sales to nontaxable persons (in practice, these are mostly private individuals), but we refer to these rules as e-commerce VAT rules because most of these transactions are conducted via the internet. In general, the place of supply is in the country of consumption, i.e., where the goods are shipped to or where the buyer of the goods or services resides, subject to any “use and enjoyment” provisions that may override this rule (see Section B, Effective use and enjoyment subsection above). Therefore:
• For supplies of services made by a nonresident supplier to a business customer (B2B), the business customer is responsible for accounting for the VAT due, using the reverse charge.
• For supplies of goods made by a nonresident supplier to a business customer (B2B), where the goods are transported from another EU Member State, the business purchasing the goods is responsible for accounting for the VAT due, as an intra-Community acquisition. If the goods come from outside the EU, the purchaser may have to report an importation of goods.
• For supplies of goods or services made by a nonresident supplier to a final consumer (B2C), the supplier is generally responsible for charging and accounting for the VAT due at the rate applicable in the customer’s country (unless the supplier’s sales fall beneath the distance selling threshold of EUR10,000 with effect from 1 July 2021). This VAT can be reported using a single VAT registration, using a “One-Stop-Shop” mechanism.
For more details about intra-EU distance sales, see the chapter on the EU.
Effective 1 July 2021, an e-commerce supplier may have a choice of how to account for VAT on its B2C supplies.
Local VAT registration. A nonresident supplier may choose to register for VAT in each Member State and account for VAT on all supplies made and recover input tax in accordance with local rules (see the Non-established businesses subsection above). Non-EU businesses may be required to appoint a fiscal representative for accounting for the VAT due on these transactions.
In Spain there are no additional special rules.
One-Stop Shop. Effective 1 July 2021, a supplier can choose to account for the VAT due under the EU One-Stop Shop (OSS), which can be used for intra-EU cross-border supplies of goods and all cross-border supplies of services made to final consumers in the EU. Unlike the previous Mini One-Stop-Shop (MOSS) scheme that applied until 30 June 2021, the OSS is not limited to crossborder supplies of electronic services, telecommunication services and broadcasting services.
The OSS is an electronic portal that allows businesses to:
• Register for VAT electronically in a single Member State for all intra-EU distance sales of goods and for B2C supplies of services
• Declare and pay VAT due on all supplies of goods and services in a single electronic quarterly return
The OSS can be used by businesses established in the EU and outside the EU. If a supplier or a deemed supplier decides to register for the OSS, it must declare and pay VAT for all supplies (goods as well as services) that fall under the OSS.
In Spain, a taxable person must submit Form 035 to the Spanish tax authorities to register for the OSS portal and register for VAT to account for all intra-EU distance sales of goods and B2C supplies of services. To register and pay VAT on all supplies in a single electronical quarterly return, a taxable person must submit Form 369. No other special rules apply in Spain.
For more details about the operation of the OSS, see the chapter on the EU.
Import One-Stop Shop. Effective 1 July 2021, the Import One-Stop Shop (IOSS) scheme applies for B2C distance sales of goods from outside the EU.
Effective 1 July 2021, VAT is due on all commercial goods imported into the EU regardless of their value. The actual supply is subject to VAT in the country where the goods are imported (the country of destination). The IOSS facilitates the declaration and payment of VAT due on the sale of low-value goods (i.e., consignments valued at less than EUR150 per consignment). It allows suppliers selling low-value goods dispatched or transported from a non-EU country to customers in the EU to collect, declare and pay the VAT due. If the IOSS is used, the importation into the EU is exempt from VAT.
For more details about the IOSS, see the chapter on the EU.
The use of the IOSS special scheme is not mandatory. If VAT is not collected via the IOSS scheme, the importation of goods into the EU is subject to import VAT in the country of final destination, and the Member State can decide freely who is liable to pay the import VAT, which could be the customer or the seller (or an electronic interface).
Postal services and couriers scheme. If the IOSS is not used and the customer is liable for the import VAT due on the supply (and importation) of consignments with a small intrinsic value (i.e., less than EUR150), the VAT can be collected using the special scheme for postal services and couriers.
For more details about the special scheme for postal services and couriers, see the chapter on the EU.
Online marketplaces and platforms. Under the new EU VAT e-commerce rules, effective 1 July 2021, taxable persons that “facilitate” certain B2C sales of goods are deemed to have purchased and then supplied those goods themselves. This means that the single supply from the “underly ing” supplier to the final consumer is split into two deemed supplies:
• A supply from the supplier to the facilitator (deemed B2B supply).
• A supply from the facilitator to the final customer (deemed B2C supply). Any intermediation service provided by the facilitator is disregarded for VAT purposes.
This provision does not cover all sales facilitated via the facilitator. It only covers distance sales of goods imported from non-EU jurisdictions in consignments with an intrinsic value not exceed ing EUR150. The jurisdiction of residence of the supplier using the facilitator is irrelevant. The supply to the facilitating platform is VAT exempt and the supplies made by that platform follow the e-commerce VAT rules as described above. In addition, the provision also covers sales within the EU if the supplier is not established within the EU. This applies to both local shipments within one Member State as well as intra-Community shipments. In both cases, the final cus tomer must be a nontaxable person.
For more details about the rules for online marketplaces, see the chapter on the EU.
Vouchers. The regulation on the VAT treatment of vouchers has been implemented through the Resolution dated on 28 December 2018, from the Spanish General Tax Directorate, which is based on the Council Directive (EU) 2016/1065 of 27 June 2016 amending Directive 2006/112/EC as regards the treatment of vouchers. According to it, there are two kind of vouchers:
• Single-purpose vouchers (SPV) are those in which the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issuing the voucher. The taxation of a supply of a SPV is the same as the supply of goods or services to which the voucher is referred. SPV is subject to VAT at the time of its supply.
• Multipurpose vouchers (MPV): is a voucher which, at the time of its issuance, the taxation of the underlying supply cannot be known. In particular, MPV are those that can be redeemed by goods or services located inside or outside the VAT territory or goods or services taxed at dif ferent VAT rates. The supply of the MPV is not subject to VAT. It will be the supply of goods or services for which the MPV is redeemed that will be subject to VAT.
Registration procedures. To obtain a Spanish VAT number, an application must be made in Spanish, which requires certain supporting information:
• Excerpt of the Commercial Registry or similar where the company is registered and where the names of the legal representatives are shown
• Power of attorney for the company’s fiscal representative
• Passport copies of the legal representatives of the company
• Spanish identification number for foreigners (NIE number). The Spanish tax authorities require the person or persons signing on behalf of a nonresident entity for the purposes of its registra tion to have a nonresident ID number in Spain. Therefore, a new Form 030 is required by the Spanish tax authorities in connection with the registration of nonresident entities. Although this obligation could be argued according to law (it is not required according to the wording of the VAT law currently in force), the Spanish tax authorities are refusing to register nonresident entities without the ID numbers of their representatives
• Census Forms (036-030)
In principle, the registration should be performed before the commencement of the economic activity in Spain. Once all the necessary information is gathered, the registration should be obtained on the same day that the registration return (Form 036) is filed. The common procedure is to provide the documentation in person to the tax authorities.
Deregistration. To deregister for VAT purposes, the taxable person must submit online, a census return (Form 036) to the Spanish tax authorities.
Deregistering from the census as a professional entrepreneur involves more, as it cancels the tax identification number. The same census return (Form 036) is submitted in the same way, but it must be accompanied by additional documentation.
Changes to VAT registration details. Changes related to the company information, such as business address, corporate form, application to special VAT regimes, etc., should be informed to the tax authority. Generally, the communication should be processed through the electronic filing of a census return (Form 036) within one month of its occurrence.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT.
The VAT rates are:
• Standard rate: 21%
• Reduced rates: 4%, 10%
The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for a reduced rate or an exemption.
Due to COVID-19, the supply of sanitary products, COVID-19 tests and COVID-19 vaccines will be VAT zero-rated until December 2022.
Examples of goods and services taxable at 4%
• Basic foodstuffs
• Books, journals and magazines
• Pharmaceutical products for humans
• Certain goods and services for handicapped persons
Examples of goods and services taxable at 10%
• Food and drink for human or animal consumption (except for sweet beverages, which will be taxed at 21% from 1 January 2021 onward)
• Pharmaceutical products for animals
• Prescription glasses and contact lenses
• Certain medical equipment
• Residential dwellings
• Passenger transport
• Hotel and restaurant services
• Garbage collection
• Trade fairs and exhibitions
• Cinema tickets
• Cultural live shows/entertainment
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Immovable property, in certain cases
• Medical services
• Finance
• Insurance
• Universal postal services
Option to tax for exempt supplies. Taxable persons may opt to pay tax on supplies of real estate (land or buildings) if:
• The recipient has the right, total or partial, to deduct input tax Or
• The recipient has no right to deduct input tax, but the goods acquired would be destined, totally or partially, to carry out operations giving the right to deduct input tax
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods is when the goods are placed at the disposal of the purchaser. The basic time of supply for services is when the service is performed. If the service is ancillary to a supply of goods, the time of supply is when the goods are placed at the disposal of the purchaser. A VAT invoice must generally be issued at the time of supply.
Deposits and prepayments. The tax point for prepayments or advance payments is the date when the advance payment is received.
Continuous supplies of services. The tax point for supplies of continuous supplies of services is when each payment is due.
Goods sent on approval for sale or return. There are no special time of supply rules in Spain for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above). However, where the goods are returned, the taxable amount must be modified, and a rectifying invoice should be issued from the supplier.
Reverse-charge services. There are no special time of supply rules in Spain for supplies of reversecharge services. As such, the general time of supply rules apply (as outlined above).
Leased assets. The tax point for supplies of leased assets is when each payment is due.
Imported goods. The time of supply for imported goods is the date of importation (according to the customs documents) or the date on which the goods leave a duty suspension regime.
Intra-Community acquisitions. The tax point for intra-Community acquisitions is the following:
• The 15th day of the month following the commencement of the dispatch or transport date of the goods to the acquirer
Or
• The issuance date of the invoice documenting the supply, if it is issued prior to the commence ment of the dispatch/transport
• The general rule for pre-payments does not apply to intra-Community supplies and acquisitions of goods; that is, a prepayment does not modify the tax point.
Intra-Community supplies of goods. The time of supply will take place:
• The 15th day of the month following the commencement of the dispatch or transport date of the goods to the acquirer
Or
• The issuance date of the invoice documenting the supply, if it is issued prior to the commence ment of the dispatch/transport
Distance sales. There are no special time of supply rules in Spain for supplies of distance sales. As such, the general time of supply rules apply (as outlined above).
F. Recovery of VAT by taxable persons
A taxable person may recover input tax, which is VAT charged on goods and services supplied for business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is tax charged on supplies made. Input tax may be deducted in the accounting period in which the output tax was charged or in any successive period, up to a period of four years from the time of supply.
Input tax includes VAT charged on goods and services supplied in Spain, VAT paid on imports of goods and VAT self-assessed on intra-Community acquisitions of goods and reverse-charge transactions.
A valid tax invoice or customs document is required to apply for input tax deduction.
The time limit for a taxable person to reclaim input tax in Spain is four years. Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used directly and exclusively for business purposes. In addition, input tax may not be recovered for some items of business expenditure.
In general, input tax may be claimed with respect to travel, hotel and restaurant expenses if the Spanish corporate income tax law allows for a deduction.
The following lists provide some examples of items of expenditure for which input tax is not deductible and examples of items for which input tax is deductible if the expenditure is related to a taxable business use.
Examples of items for which input tax is nondeductible
• Business entertainment
• Business gifts (unless of very low value)
• Alcohol and tobacco
• Private expenditure
Examples of items for which input tax is deductible (if related to a taxable business use)
• 50% of purchase, hiring, leasing, maintenance and fuel for cars, vans and trucks (a higher percentage of deduction is allowed if the taxable person provides to the authorities the evidence proving that the percentage of time used for business purposes exceeds 50%)
• Attending conferences, seminars and training courses
• Advertising
• Business use of home telephone or mobile phone
• 50% of parking
• Taxis, restaurant meals, hotel accommodation and travel expenses if the expense is allowable under the Spanish income tax or corporate tax law or if the taxable person has the appropriate documentation (generally, an invoice)
Partial exemption. Input tax directly related to the making of exempt supplies is, as a rule, not recoverable. If a Spanish taxable person makes both exempt and taxable supplies, it may not recover input tax in full. The amount of input tax that a partially exempt business may recover is calculated using the general pro rata method or the direct allocation method. The general pro rata method is generally used unless the taxable person chooses the direct allocation method. However, the direct allocation method must be used if the general pro rata method provides a VAT recovery amount that exceeds by 10% or more the amount of input tax recoverable using the direct allocation method.
General pro rata method. The general pro rata method is based on the ratio of taxable turnover and total turnover during the calendar year. Because the taxable person cannot know its annual ratio for the current calendar year when filing its periodic VAT returns, the pro rata percentage
for the preceding year or an agreed provisional percentage is used. The calculation is regularized in the last period of the VAT year (that is, the actual figures for the year are calculated and applied and any further adjustment is made).
Direct allocation method. The direct allocation method consists of the following two-stage calculation:
• In the first stage, the taxable person must distinguish between input tax that corresponds to taxable and to exempt supplies. Input tax directly allocated to taxable supplies is deductible, while input tax directly related to exempt supplies is not deductible.
• The remaining input tax that is not allocated directly to exempt and taxable supplies is apportioned using the general pro rata method. The recovery percentage is rounded up to the nearest whole number (for example, a percentage of 16.3% is rounded up to 17%).
• Taxable persons can opt for the direct allocation method in December of the current year. That method is then applied to the deductions for that whole year and in the following two years.
Deductions in different sectors. If a taxable person undertakes activities in different economic sectors, it must apply different methods to calculate the partial exemption deduction for each sector, as if each economic activity were carried out by an independent business. This rule applies if the business undertakes activities that are subject to different pro rata recovery percentages. A busi ness is deemed to undertake such activities in the following circumstances:
• The activities fall under different groups according to the national classification of economic activities.
• The pro rata percentage for VAT recovery for one economic sector of the business differs by more than 50 percentage points (either higher or lower) from another sector of the business.
If goods or services are used in one of the distinct economic sectors, the VAT paid is recovered according to the pro rata recovery percentage for that sector. However, if goods or services are used by more than one economic sector, the amount of VAT recovered must be based on the general pro rata method.
For the direct allocation method (i.e., the standard partial exemption method), if the application of this method is compulsory because the 10% requirement is exceeded (as per the details out lined above), in the last VAT return of the calendar year (i.e., the December period), the taxable person must indicate the application of this regime and present a census form informing the tax authorities of the application.
For the special methods, i.e., the different sector methods, where goods or services are used in one of the distant economic sectors, the pro-rata recovery percentage for that sector must be used. These methods are mandatory, and as such taxable persons are not required to submit a census form reporting to the tax authorities of its application.
Capital goods. Capital goods are items of capital expenditure that are used in a business over one year and that have an acquisition price exceeding EUR3,005.06. Input tax is deducted in the VAT year in which the goods are acquired and first used. The amount of input tax recovered depends on the taxable person’s pro rata recovery percentage in the VAT year of acquisition and first use. However, the amount of input tax recovered for capital goods must be adjusted over time if the taxable person’s pro rata recovery percentage differs by 10 percentage points during the adjust ment period or if the goods are transferred or sold during the adjustment period.
In Spain, the capital goods adjustment applies to the following assets for the number of years indi cated:
• Immovable property: adjusted for a period of 10 years (the year of the acquisition and first use and the following nine calendar years)
• Movable property: adjusted for a period of five years (the year of the acquisition and first use and the following four calendar years)
The adjustment is applied each year following the year of acquisition and first use, to a fraction of the total input tax (1/10 for immovable property and 1/5 for other movable capital goods). The adjustment may result in either an increase or a decrease of deductible input tax, depending on whether the ratio of taxable supplies made by the business increases or decreases, compared with the year in which the capital goods were acquired and first used. In Spain, the capital goods adjustment does not apply to any services.
Refunds. If the amount of input tax recoverable exceeds the amount of output tax payable, a refund may be claimed. A business may choose to request a refund of the excess VAT or to carry it forward to offset output tax in the following four years.
Two different procedures are available with respect to applications for refund of the excess input tax. These procedures are summarized below.
General procedure. Under the general procedure, the taxable person may only apply for the refund in the last VAT return of the year (monthly or quarterly). The tax authorities have a sixmonth period beginning on the date of the application to analyze whether the taxable person has the right to obtain the refund. After such term is exceeded, delay interest on the refund due is payable to the taxable person.
Special procedure. Under the special procedure, the taxable person may apply for inclusion in the monthly VAT refund census. Taxable persons included in such a census may apply for the VAT refund in each monthly VAT return. The tax authorities have a six-month period beginning on the date of the application to analyze whether the taxable person has the right to obtain the refund. After such term is exceeded, delay interest on the refund due is payable to the taxable person. However, as of the month following the request, the company will be obliged to submit the infor mation related to its invoices through the “Immediate Submission of Information” (ISI) system, (known as SII in Spanish).
Pre-registration costs. Input tax incurred on pre-registration costs in Spain is not recoverable. However, the Spanish courts have accepted it in certain cases.
Bad debts. Entities with an annual turnover of EUR6,010,121 or lower could consider that a credit qualifies as bad debt, and thus, the taxable amount could be modified once six months or one year has elapsed as of the date of the accrual.
The term to amend the taxable base is extended from one to three months, as of the date of bankruptcy declaration.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Spain.
G. Recovery of VAT by non-established businesses
The Spanish VAT authorities refund VAT incurred by businesses that are neither established nor registered for VAT in Spain. Non-established businesses may claim Spanish VAT to the same extent as VAT-registered businesses.
EU businesses. For businesses established in the EU, refunds are made under the terms of the EU 2008/9/EC Directive. The VAT refund procedure under the EU Directive 2008/9 may be used only if the business did not perform any taxable supplies in Spain during the refund period (excluding supplies covered by the reverse charge). For full details, see the chapter on the EU.
Please find below specific rules for Spain:
• The Spanish VAT authorities have made the commitment to pay refunds within six months after the date on which the claim for a refund is submitted, but if additional information is requested, the reimbursement procedure could take up to eight months. Interest is paid on late refunds.
• The deadline for claiming the Spanish input VAT would be the 30th of September of the fol lowing year.
• Claims must be submitted using VAT refund claim Form 360.
• Invoices supporting transactions whose taxable base exceeds the amount of EUR1,000 would have to be attached to the VAT refund claim.
Non-EU businesses. For businesses established outside the EU, refunds are made under the terms of the EU 13th Directive.
Spain applies the principle of reciprocity; meaning the country where the claimant is established must also provide VAT refunds to Spanish businesses. Spanish VAT is only refunded on the con dition of reciprocity to taxable persons of Canada, Israel, Japan, Monaco, Norway, Switzerland and the United Kingdom (as from January 2021)
Please find below specific rules for Spain:
• Non-EU businesses that apply for the refund should appoint a representative that is established in Spain, which should comply with the tax formalities and is jointly liable when applying for the VAT refund.
• The refund procedure starts with the submission of the documents that support the claim with the submission of Tax Form 361.
• The application must be submitted electronically by the fiscal representative of the non-estab lished business in Spain. The amount to be refunded can cover the VAT accrued in the year before the application. The deadline for submitting the application is September 30th of the following year.
• The following documents should be submitted to support the claim:
A draft letter with information of the company (such as name, tax ID, address, telephone number, email address), a description of the activities performed by the company in Spain, the VAT period of claiming, the total amount of the refund and a bank account where the refund should be received
A commitment to reimburse any amount wrongly received and the statement through which the non-EU business states that no other activity other than that described in the draft letter is being performed in Spain
A certificate granted by the tax authorities of the country where the taxable person is established that states that the company performs economic activities
A list of the documents that originate the right to deduct input VAT must be available for the STA. It would be advisable to provide the tax authority with a copy of those documents anticipating its future request
Late payment interest. The tax authorities have a six-month period beginning on the date of the application to analyze whether the taxable person has the right to obtain the refund. After such term is exceeded, delay interest on the refund due is payable to the taxable person. The adminis trative delay interest for 2021 is 3.75%. The draft Finance Bill for 2022 has proposed to keep the delay interest at 3.75%. However, at the time of preparing this chapter, this has not been approved.
H. Invoicing
VAT invoices. A Spanish taxable person must generally provide a VAT invoice for all taxable sup plies made, including exports and intra-Community supplies. VAT invoices are not automatically required for certain transactions if the taxable amount does not exceed EUR400 (EUR3,000 for certain retail transactions). Simplified invoices are issued instead, unless requested by the cus tomer.
A VAT invoice is necessary to support a claim for input tax deduction or a refund under the EU 2008/9/EC Directive or the EU 13th Directive refund schemes (see the chapter on the EU).
Credit notes. The Spanish Invoicing Regulations do not foresee the so-called “credit notes” or “debit notes” and consequently the invoices are amended through a rectifying invoice (factura rectificativa), which must be cross-referenced to the original invoice and must contain the same information together with the reason for the amendment and the final corrected position.
Electronic invoicing. Spanish VAT law permits electronic invoicing in line with EU Directive 2010/45/EU (see the chapter on the EU).
It is mandatory to issue electronic invoices in connection with the supplies performed with Spanish public entities.
The “Immediate Submission of Information” (ISI) system moves from a system that has been in place for the last 30 years, to a new system whereby VAT books are registered with the electronic office of the Spanish tax authorities, by supplying invoice information on an almost immediate basis. Companies will be required to keep VAT books with the electronic office of the Spanish tax authorities, by electronically providing invoice details. In this regard, companies are required to send the Spanish tax authorities their invoice data and the Spanish tax authorities will use this information to configure the different VAT books of the company in real time.
In addition, the Spanish tax authorities will use the ISI system to cross-check in real-time informa tion provided by suppliers and clients. Therefore, discrepancies between information provided by the company and information provided by third parties should be avoided, as they can be immediately detected by the Spanish tax authorities and could have negative consequences for both parties. See Section I for more detail on the ISI.
Simplified VAT invoices. The Spanish Invoicing Regulation foresees in its Article 4 a list of trans actions and circumstances under which the transactions can be documented by a simplified invoice (replacing the former “tickets”). Simplified invoices can be generally used if the amount of the invoice does not exceed the threshold of EUR400 (VAT included) and for amending invoices.
In particular, if the amount of the invoice does not exceed the threshold of EUR3,000 (VAT included) and the transactions correspond to the following supplies:
• Ambulance supply of goods or supply of services
• Home delivered supply of goods or supply of services
• Passenger and luggage transport services
• Hotel and catering services provided by restaurants and similar establishments, as well as the supply of drinks or meals to be consumed immediately
• Services provided by dance halls and discotheques
• Telephone services provided through the use of telephone booths for public use, as well as through cards that do not allow identification of the person who is phoning
• Hairdressing services and those provided by beauty institutes
• Use of sports halls
• Photo development and services provided by photographic studios
• Parking services
• Movie rental
• Dry cleaning and laundry services
• Use of toll roads
In addition, the Spanish invoicing regulation is not in line with the EU rules (which foresee the general invoicing exemption, e.g., for OSS distance sales). Instead, in Spain the supplier must issue invoices under the Spanish invoicing regulation when it applies to the OSS and IOSS scheme, being that Spain is the Member State of Identification.
Self-billing. Self-billing is allowed in Spain. Self-billing by the recipient of the transaction is allowed in Spain when the following conditions are met:
• There must be an agreement through which the supplier authorizes the recipient to issue the invoice
• The recipient must forward a copy of the invoice to the supplier, who must accept and approve the invoice
• These invoices are considered to have been issued in the name and on behalf of the supplier
Proof of exports and intra-Community supplies. VAT is not chargeable on supplies of exported goods or on intra-Community supplies of goods (see the chapter on the EU). However, to qualify as zero-rated, exports and intra-Community supplies they must be supported by evidence that the goods have left Spain. Acceptable proof includes the following documentation:
• For an export, the documentation consists of the customs declaration (export SAD) with evi dence that it was filed and admitted by the customs authorities, transport documents and an indication on the invoice of the article of the Spanish VAT law that allows exemption with credit for the supply.
• For an intra-Community supply, the supplier must retain a copy of the invoice indicating the customer’s valid VAT identification number (issued by another EU Member State), together with a range of commercial documentation, such as bills of lading, transport documentation and proof of payment. Such proof for intra-Community supplies is included within the EU Quick Fixes, coming into effect from 1 January 2020. See the subsection on Quick Fixes above for more information.
Foreign currency invoices. If a VAT invoice is issued in a foreign currency, the values for VAT purposes and the VAT amounts must be converted to the domestic currency, which is the euro (EUR). The exchange rate that is used must be the official selling rate published by the Bank of Spain for the date on which the VAT is due. The VAT amount must be expressly stated in EUR.
Supplies to nontaxable persons. The Spanish Invoicing Regulation foresees in its article 4 a list of transactions that can be documented by a simplified invoice (replacing the former “tickets”), for instance in a retail supply (see the subsection above on Simplified VAT invoices).
Transactions between related parties. For a transaction between related parties, the value for VAT purposes is calculated as the market value of the goods delivered or services provided.
Records. The Immediate Submission of Information (ISI) system is the record-keeping system in Spain. Under the system, the information related to all invoices issued, received, customs docu ments and accountancy documents, if any, must be transmitted electronically and almost imme diately to the Spanish tax authorities, so that the Spanish tax authorities have all of the information relating to the operations carried out by taxable persons in real time. In particular, the information related to each invoice issued or received must be electronically communicated to the Spanish tax authority within four working days of the date of its issuance or from the date it was accounted for, respectively. For further details see the Digital tax administration subsec tion below.
Record retention period. For tax purposes, all the invoices and records must be kept for four years (statute of limitation period). However, for commercial law purposes, all the documents must be retained by the taxable persons for at least six years.
Electronic archiving. The Invoicing Regulation envisages the obligation of keeping the invoices in a format that ensures their readability, authenticity and content. This obligation can be fulfilled by electronic means if the above requirements are met.
A taxable person can keep records electronically outside of Spain, only if there is a mutual assis tance agreement in place with the country where the records are kept. If not, the taxable person should inform the Spanish tax authorities accordingly, for approval to keep such records outside of Spain.
I. Returns and payment
Periodic returns. Periodic VAT returns are submitted in Spain on a monthly or quarterly basis, depending on the taxable person’s turnover and activities.
Taxable persons whose turnover in the previous year exceeded EUR6,010,121 must file their VAT returns on a monthly basis. Taxable persons included in the monthly VAT refund census must also file monthly VAT returns (and the VAT books), because they are entitled to apply for a VAT refund on a monthly basis. Taxable persons within a VAT group must also submit VAT returns on a monthly basis.
Quarterly VAT returns must be submitted by the 20th day of the month following the end of the quarter for the first three calendar quarters and by 30 January of the following year for the last calendar quarter. Monthly VAT returns must be filed by the 20th day of the month following the month of the assessment.
Periodic payments. Periodic VAT returns must be paid by the due date. Quarterly VAT returns must be paid by the 20th day of the month following the end of the quarter for the first three calendar quarters and by 30 January of the following year for the last calendar quarter. Monthly VAT returns must be paid by the 30th day of the month following the month of the assessment.
Whether the VAT return results in a credit position, the taxable person should proceed with the payment to submit the VAT return. In this sense, there are some alternatives:
• The payment can be made through direct debit in a Spanish bank account of the taxable person. In those cases, the VAT return needs to be submitted at least five days before the end of each reporting period.
• The payment can be also made by using the Spanish bank account of the taxable person or even by using a debit card of the company from a Spanish bank account.
• If the company does not have a Spanish bank account, the payment could be done:
By a third party with a Spanish bank account
Through the procedure of “recognition of tax debt” and making a transfer to the bank of the authorities – this is a special procedure
Electronic filing. Electronic filing is mandatory in Spain for all taxable persons. VAT returns (Form 303s) and the Informative Annual Summary VAT return (Form 390) must be filed through electronic means by using an electronic signature owned by the taxable person or a third party duly empowered. When the VAT returns (Form 303s) result in amounts to be paid a Spanish bank account number is required.
Payments on account. Payments on account are not required in Spain.
Special schemes. Travel agencies. There is a special scheme for travel agencies that includes, among others, the opt-out possibility in connection with B2B supplies where the normal VAT regime could be applied.
Cash accounting. Under the cash accounting scheme, taxable persons report the VAT charged on sales of goods or supply of services on the date when the payment is received and the right to deduct input tax arises when payment is made. The scheme is optional and is subject to certain requirements.
Simplified regime. The simplified regime allows taxable persons to determine the payable amount on the basis of certain indexes, modules and other parameters. This regime can only be applied by individuals and some other entities conducting certain activities envisaged by the law.
Farming, agriculture and fishing. Under this regime, taxable persons are not obliged to charge VAT for their sales and do not have the right to deduct the input tax borne in the purchases. Additionally, taxable persons are released from most of the formal obligations.
Secondhand, art and antiques goods. The special system for secondhand goods is a type of VAT system, applied voluntarily to resellers when acting in their own name and supplying the goods referred to above. These supplies will be charged with VAT by applying the corresponding tax rate on a taxable basis, which will be the profit margin obtained in each transaction.
Investment gold. Mandatory regime applicable to the supplies of gold qualifying as investment gold. In general, the regime implies that the supplies of investment gold are VAT exempt, with a limitation to deduct the input tax and the possibility to waive such exemption.
Retailers. The regime is applicable to retailers selling goods to final consumers, in case the retailer does not carry out any transformation over the goods to be sold. Under the retailer regime, the supplier of the retailer will charge the latter an extra cost in the invoices (in general 5.2%). By doing this, the retailer avoids all the formal obligations (i.e., submission of VAT returns), but it will not be entitled to deduct the input tax.
Annual returns. All taxable persons not applying the ISI system must complete the annual sum mary VAT return. The Informative Annual Summary VAT return (Form 390) contains information declared in the periodical VAT returns of the corresponding calendar years and additional informa tion. It must be filed electronically between 1 January and 30 January of the following year.
Supplementary filings. Intrastat. A Spanish taxable person that trades with goods with other EU countries must complete statistical reports, known as Intrastat, if the value of its EU sales or purchases of goods exceeds certain thresholds. Separate reports are required for intra-Community acquisitions (Intrastat Arrivals) and for intra-Community supplies (Intrastat Dispatches).
The threshold for Intrastat Arrivals and Dispatches for 2022 is EUR400,000.
The Intrastat return submission period is monthly. The submission deadline is the 12th day fol lowing each month. A taxable person required to file Intrastat returns must file them each month even if they are nil returns. Intrastat returns must be filed in EUR.
EU Sales and Acquisitions List. If a Spanish taxable person makes intra-Community supplies or intra-Community acquisitions of goods and/or services in any return period, it must submit an EU Sales and Acquisitions List (ESAL). An ESAL return is not required for any period in which the taxable person does not make any intra-Community supplies or acquisitions of goods and/or services.
In principle, ESAL returns are submitted on a monthly basis. However, ESAL returns must be filed on a quarterly basis if the intra-EU supplies of goods and/or services performed in the current quarter or during the four preceding calendar quarters do not exceed the threshold of EUR50,000.
ESALs must be submitted by the 20th day of the month following the end of the monthly or quarterly filing period. The last monthly or quarterly ESAL for a year must be filed by 30 January of the following year.
Correcting errors in previous returns. In case the error causes prejudice to the Spanish tax authority (e.g., the right input tax is less than stated as deductible), the amendment should be done through the submission of a supplementary return. However, if the error is prejudicial for the
taxable person’s interest, in certain cases, it should amend it through the submission of a correc tive letter applying for the amendment of the filed VAT return. In other cases, the amendment can be applied in the VAT return corresponding to the period in which the corrective invoice is issued or received.
In case the error is spotted before the deadline for submitting the VAT return, it can be amended through the filing of another VAT return, which is going to replace the one previously submitted.
All the above filings must be done online through the tax authorities’ website (https://sede.agen ciatributaria.gob.es/).
Digital tax administration. Immediate Submission of Information (ISI). The Immediate Submission of Information (ISI) system entered into force from 1 July 2017. Under the new system, the information related to all invoices issued, received, customs documents and accountancy docu ments, if any, must be transmitted electronically and almost immediately to the Spanish tax authorities, so that the Spanish tax authorities have all the information relating to the operations carried out by taxable persons in real time. In particular, the information related to each invoice issued or received must be electronically communicated to the Spanish tax authority within four working days of the date of its issuance or from the date it was accounted for, respectively. The new system is compulsory for businesses and professionals who are required to file VAT returns on a monthly basis, in other words those who:
• Have a turnover of over EUR6 million
• Are included in the monthly refund regime
• Are applying the VAT grouping provisions
The system can be used by any other business or professional by filing a census form, whereby they expressly opt to be included in the system.
Taxable persons who are not obliged to comply with ISI must keep their VAT books in their ERP system and provide them to the Spanish tax authorities upon request. The VAT books must be provided to the Spanish tax authorities upon its request within the deadline provided by the author ities in said request, and as a general rule, this is generally 10 to 15 working days.
The deadline for filing VAT returns for taxable persons who file on a monthly basis is extended to the 30th day of the following month or for the return relating to January, until the last day of February. Additionally, taxable persons obliged to comply with the ISI are not obliged to file the annual summary and the annual return of transactions with third parties (Form 347).
Bookkeeping system for products subject to excise duties (SILICIE). As of 1 January 2020, com pliance with bookkeeping requirements relating to products subject to excise duties and, when applicable, raw materials used in their production, will be carried out via the tax agency’s e-office with the electronic delivery of accounting records. SILICIE will be compulsory to the owners of factories, tax warehouses, tax stores, receiving warehouses and vinegar factories. Under the new system, the information related to the accounting records must be transmitted electronically and almost immediately to the Spanish tax authorities. In general terms, the information must be electronically communicated to the Spanish tax authorities within 24 hours of the date of the movement, the transaction or the process that is recorded.
J. Penalties
Penalties for late registration. A penalty of EUR400 may be assessed for late registration. This penalty may be reduced to EUR200 if the taxable person registers voluntarily (albeit late) without receiving a prior request from the Spanish tax authorities.
Penalties for late payment and filings. The following surcharges apply to the late submission of VAT returns or late payment of VAT before any request by the tax authorities:
• Delay up to 12 months: 1% of the tax due for each month of delay
• Delay longer than 12 months: 15% of the tax due plus delay interest
The penalty for late or incorrect Intrastat filings depends on the level of infringement. Penalties range from EUR60 to EUR30,050.
Penalties may be imposed for late, missing or inaccurate ESLs.
Penalties for ISI. Potential penalties that the Spanish tax authorities can impose for not complying with the ISI submission correctly:
• Lack of ISI submission – 1% of the turnover: in case of failing in the obligation to keep the VAT books of invoices through the ISI, the authorities can impose a penalty consisting of 1% of the turnover, with a minimum of EUR600 and without maximum.
• Delay in the ISI reporting – 0.5% of the invoice: the delay in the submission of data in the ISI might imply the imposition of a proportional pecuniary fine of 0.5% of the amount of the rel evant invoice, with a minimum of EUR300 per quarter and a maximum of EUR6,000. This penalty may apply when the legal deadlines for reporting the invoices have been surpassed. The deadline for reporting the invoices is four working days as from the issuance date (in case of AR invoices) or posting date (in case of AP invoices), and in any case before the 16th of the following month.
• Inaccuracy or omission of transactions – 1% of the invoice: in case of inaccuracy or omission of transactions (e.g., invoices ISI reported but not correctly), the penalty would be 1% of the amount of the transactions recorded incorrectly, with a minimum of EUR150 and a maximum of EUR6,000.
Penalties for errors. The penalties for errors in the VAT returns depend on whether mistake has caused an economic damage to the tax administration or not.
If no economic damage has been produced, the penalty for late filing amounts to EUR200, while the penalty for incorrect filing amounts to EUR150.
If the error has caused an economic damage to the tax authorities (e.g., the taxable person indi cates a lower amount of output/payable VAT) the penalty amounts to 50% of the unpaid amount.
For the purpose of this penalties, an error means any inaccuracy or incorrect data indicated in the VAT returns or any VAT statement to be filed by taxable persons.
Penalties for fraud. Under the Spanish General Tax law, the use of fraudulent means makes any infringement to qualify as very severe. In such a case, the applicable penalty related to a particu lar infringement is considerably increased.
Personal liability for company officers. Company directors can be held liable for the tax debts of a company when, acting on purpose or even negligently, they have not performed the necessary acts to comply with tax requirements or they have agreed with not complying them. Furthermore, in certain cases, they can be held responsible for the penalties imposed on the company.
Statute of limitations. The statute of limitations in Spain is four years.