Regular readers of our articles will be aware that we have done a handful of guides for VAT registration in various countries. This time we’re going to be looking at VAT registration in the 9th biggest country in the world – Spain. Ecommerce in Spain is currently worth in excess of €30 billion and over 60% of the population use the internet. With such an enticing ecommerce market, it is no surprise that it is one of the most popular countries for sellers to expand their business. However, to do so they have to register for VAT in Spain. Here’s our guide on how to do just that…
When Do I Need To Register For VAT In Spain?
Like many EU countries, you need to register for VAT in Spain if you make any taxable sales or supply any services in the country. However, what is unusual about Spain is that you cannot register for VAT voluntarily. You have to already have made taxable sales of goods or services and then retrospectively pay VAT on those sales.
You must also register for VAT if you hold any stock in Spain. There is no call-off stock simplification in Spain, so you must also register for VAT when holding stock in Spain even if it is a intra-community transaction. The only time this doesn’t apply is if the consumer is considered the de facto owner of the goods.
What Will I Need For The Spanish VAT Registration Process?
When completing the process for registering for VAT in Spain, it is first worth noting that the application must completed in Spanish. In terms of supporting documents you will need, please be prepared to submit:
- A Memorandum and Articles of Association
- A certificate procured from your company’s country of residence which discloses the address of your company and a list of the directors
- A Power of Attorney form, this will be provided by your tax agent (such as ourselves) and informs the tax authorities that this agent can obtain the Spanish tax code on your behalf.
It is also very important to note that you will need to appoint a fiscal representative in Spain. Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients. If you use J&P to facilitate your Spanish VAT registration we can act as your fiscal representative.
What Does The Spanish VAT Number Look Like?
Typically, the code is a block of 9 characters that is proceeded by the prefix ES. Depending on your business operations this can sometimes vary slightly, but this is the general format and they will all begin with ES.
Once obtained, you should use this code like any other tax code. The code must be used to identify yourself when dealing with the tax authority and must be quoted on all relevant documents (customs forms, VAT return submission etc.).
Can I Postpone VAT In Spain?
The short answer is yes. One of the best things about conducting business in Spain is the fact that you can take advantage of their postponed import VAT accounting scheme. Whilst you would normally have to wait until the VAT return is filed before deducting VAT, the postponed import VAT system allows you to pay and deduct the VAT in the same VAT return. This fundamentally acts as a reverse charge mechanism on import VAT.
However, there is a catch. This system is only available to businesses with turnover that exceeds €6 million and who file monthly VAT returns. There is also the formality that to benefit from postponed import VAT, you must submit the application in November of the year before you wish to benefit from the scheme.
Conclusion
Evidently, VAT registration is an unavoidable step when it comes to expanding your business. Whilst it can be a stressful registration process, we are here to complete the process for you.
Our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we can guide you through every step of the registration process – so please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today. In addition, we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
