Registration for VAT

When could be interesting to register for VAT

There are several occasions where it could be interesting or necessary to register your company for VAT in Spain.

You would like to make distance selling or e-commerce to Spanish clients.

If you would like to make distance selling, both through traditional system or e-commerce you will need to invoice with Spanish VAT when you sell to non Spanish VAT taxpayers. This will occur in most of consume goods i.e. books, wines, books, parfums, etc.

You will provide digital services.

From July 1 2003, companies outside the E.U. are obliged to register and collect value-added tax (VAT) on digital services.

You would like to invoice your Spanish clients with Spanish VAT.

It is some times convenient and even necessary to invoice to your Spanish clients with Spanish VAT. This will avoid your client some administrative works, and will demonstrate your attitude to be present in the Spanish market.


It is also common that big companies request to their suppliers an invoice issued with a Spanish tax number.

You would prefer to register to recover or compensate VAT more quick and efficiently.

If you are rendering services or selling goods to Spanish clients and on the other hand you are paying VAT to Spanish suppliers, it could be more convenient for you to register for Spanish VAT so that you will balance it against VAT paid.

In some cases you this could be convenient from a financial point of view as you will avoid delays in applications for VAT refunds.

How should you register for VAT.

It is very simple to register a for VAT. For that purposes you will only need to grant a power of attorney to our company appointing us as your tax representative in Spain.

The power should be adapted to your activity and needings in Spain. Please contact us and we will freely informed you about the best possibilities for your company.


Digital Services.

From July 1 2003, companies outside the E.U. are obliged to collect value-added tax (VAT) on digital services.

Under the rules, no obligations will be imposed on non-E.U. suppliers selling to business customers in the European Union, since the VAT will be paid by the importing company under self-assessment arrangements.

However, the rules require suppliers of digital products from outside the E.U. to charge VAT on sales to private consumers.

The directive covers the gamut of electronic services: Web site supply; Web hosting; distance maintenance of programs and equipment; supply of software and updating of that software; supply of images, text and information and making databases available; supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events." Distance teaching is also affected.

When is a non-EU business affected by these changes?

Only when it makes business to consumer (B2C) sales to customers in the EU.

What procedures are involved in complying with the tax?

There are two main options to collect and account for VAT:

· Establishing within the EU or registering as a non-established supplier in each Member State of the EU where taxable activities are conducted.

· Register with a single VAT authority in a Member State of their choice.

Under this latest scheme, all the procedures they need to fulfil – registration, payment and reporting – will be handled through the tax administration which they have selected. All sales will them charge the VAT rate of this state and non the rate of the country where sales are performed.

Standard VAT rates in EU States are:

Belgium
21%
Denmark
25%
Germany
16%
Greece
18%
Spain
16%
France
19,6%
Ireland
21%
Italy
20%
Luxembourg
15%
Netherlands
19%
Austria
20%
Portugal
19%
Finland
22%
Sweeden
25%
United Kingdom
17,5%

Can a business registered under the special scheme recover input tax?

If a non EU business had to pay VAT on goods or services acquired for the purposes of its taxable business activities, in any of the EU States, it could apply for the refund of such tax.

I should register as digital services provider. What do I do next?

You will need to be registered with an EU Member State to obtain an identification number and account for VAT in that State in respect of your supplies EU-wide.

We can assist in your registration and compliance matters such as the preparation of the VAT Returns which will require to be filed. We can also assist you in the maintenance of your records and represent you before the tax authorities.

Contact us in order to get the free advise of our experts about your eventual registration in Spain to deal with your digital services in the EU.

There are some cases where you must invoice with Spanish VAT, this happens when you invoice to non Spanish residents for services rendered in Spain subject to Spanish VAT such as works connected with land.