Basic rules of VAT accounting in Spain


Spain is a popular tourist destination. Many entrepreneurs also want to invest in the country to expand their customer base and increase sales revenue. Doing business effectively, however, requires an understanding of local tax regulations. How is VAT accounted for in Spain? This topic deserves more attention.

Obligation to obtain a VAT number

In Spain, the VAT number is called the Número de Identificación Fiscal (NIF for short). It is necessary to obtain it when a company exceeds a turnover of EUR 10,000 within the EU. To obtain a Spanish VAT number, an application must be submitted to the Spanish tax office. In order to do so, the company must have a local representative. This is the procedure required by Spanish law. It is worth mentioning that the procedures at the local offices take some time, so the formalities should be planned well in advance.

Various formats of VAT number

Spanish VAT number can come in several formats. It can have 11 characters that start with the ES country code and end with 9 digits. The NIF can also include letters – either at the beginning or at the end of the number. Identification number can be very easily checked online, using the VIES system. In this way, cooperation with entities operating in EU member states is simplified to the maximum.

Several rates of VAT in Spain

In Spain, the standard rate of VAT is 21%. It applies to all the most common services, for example, water, energy, fuel and cosmetics. Two reduced rates are also used: 10% and 4%. The former covers products and services such as public transport, medicines for pets or hotel accommodation. Super reduced rate of 4%, on the other hand, applies to food products and medicines for humans. Certain services, including, medical and educational services, are also exempt from VAT.

Submitting VAT returns

VAT returns in Spain can be filed monthly or quarterly, depending on whether the company has exceeded the turnover threshold of €6 million in the previous year. If it has, the returns must be filed monthly and the assignment to this mechanism operates automatically. The deadline for the annual VAT return is 30 January of the following year. For monthly VAT returns, the deadline is the 30th, while for quarterly returns the deadline is the 20th of the following period.

Specialized tax office support

It is the entrepreneur’s responsibility to correctly calculate VAT on the sale of goods and services. Detailed information can be found on the website of the Spanish Tax Agency. Many companies choose to work with a specialized tax office such as INTERTAX. This allows them to focus on developing sales of their products and not to worry about penalties from the Spanish tax authority. This can be an important step to gain a competitive advantage in a foreign market.


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Founded in 1994 by the late Pamela Hulse Andrews, Cascade Business News (CBN) became Central Oregon’s premier business publication. •

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