Who is required to register VAT?
- import goods to Spain,
- sell or purchase goods in Spain,
- sell goods online directly to Spanish consumers (registration is required when the annual sales value exceeds EUR 35,000).,
- store goods in Italy with the purpose of further resale,
- organize live events in Italy, such as shows, conferences, etc.
In accordance with Spanish regulations, in order to register VAT, a company must complete a relevant form in Spanish and file it along with the following documents:
- confirmation of VAT registration in the country of origin,
- the company’s articles of partnership or articles of association,
- copy from the national commercial register,
- declaration that the company does not have a registered office in Spain,
- power of attorney in notarial writing for a fiscal (Spain requires foreign entities to use the services of a local fiscal agent).
The registration should take place in a tax office local to the fiscal agent before the start of conducting business activities in Spain.
Foreign entities whose annual sales value for the last year has not exceeded EUR 6,000,000, are required to file VAT declarations on a quarterly basis. However, if the value exceeds this amount, declarations should be filed on a monthly basis. In both cases, an annual declaration is obligatory.
The deadline for VAT declarations and payment to the tax office is the 20th day of the month following the closing of the reporting period. Annual declarations are to be submitted by the 31st of January the following year.
Penalties for infringements of VAT regulations fall between 20% and 200% of the outstanding VAT amount. Moreover, delay in payment may result in interest charges (most commonly amounting to 5% per month).
Input VAT from restaurant and accommodation services, costs of transport and the purchase of goods for further resale, as well as VAT from marketing costs are tax deductible, unlike VAT from promotional business gifts and representation costs.
Foreign entities conducting business activities in Spain must also abide by local regulations concerning, among others, invoicing and archiving of bill and registries for 10 years.
Distance selling threshold: EUR 35,000
Currently, VAT rates in Spain are:
- 21% – base rate (applicable to all instances where a reduced rate does not apply)
- 4% & 10% – reduced rates applicable only to particular goods and services (10% - medicine, medicinal products, passenger transport, tickets for cultural, sports and entertainment events; 4% - basic food products and newspapers)
Services we provide in this country:
- VAT Registration
- VAT Settlements
- VAT Consulting