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Introduction to VAT in Spain
Like other EU countries, Spain's VAT registration and declaration are established in accordance with the EU VAT directive.
The VAT rate in Spain is established by the Spanish government, which is 21%. The VAT rate is decreased to 10% for medicine, drugs, passenger transportation, and cultural and sports activities; and 4% for food and newspapers.
The EU's VAT directive specifies the details of VAT receipts, calculations, and most of the implementation within EU member states. Spain is obliged to comply with the EU VAT directive in its tax laws.
Spanish VAT Law
Spain's VAT is included in the General Tax Code, supervised by Agencia de Administración Tributaria (Spanish Taxation Authority or AEAT).
Spanish VAT registration
In Spain, foreign companies can register for VAT without a local entity, which is called non-resident VAT transaction. There is no registration threshold for non-resident merchants in Spain. The VAT number must be obtained before the start of taxable transactions.
Spain has strict regulations for VAT registration. The circumstances where VAT registration in Spain is usually required include:
Import items to Spain
Organize on-site activities, meetings, etc. in Spain
Storage of spare goods for resale in Spanish warehouses
Provide more than 12 months of 'supply and installation' services
Sell goods from Italy to other EU countries
Remote sales to individuals, such as online retail
Generally speaking, Spanish VAT registration takes approximately 1 to 2 weeks, depending on the situation.
Spanish VAT enforcement
The recording and execution of business transactions in Spain is specifically regulated. These guidelines include:
Spanish Receipts Requirements
Foreign Exchange Statements and Translation
Correction of past reporting errors
Credit notes and change records
Accounting records must be saved
Spanish VAT rate
Starting from September 2012, Spain's standard VAT rate has been raised from 18% to 21%. The VAT rate for passenger transportation, hotels, catering industry, and other service industries is 10%; The VAT rate for food and beverages, chemical products, construction industry, and certain newspapers is 4%.
The above tax rates may vary, including exemptions for taxable goods.
Spanish VAT declaration
Companies with a Spanish VAT registration number must regularly submit transaction and cost information for all goods subject to taxation. In Spain, it is generally submitted on a quarterly basis. The deadline for VAT declaration is the 20th of the month after the reporting period.
Intrastat and EC sales list in Spain
On the basis of Spanish VAT declaration, companies may be required to provide additional data information.
In Spain, the Intrastat system requires that when a company's sales (scheduling) and purchases (acquisitions) within the EU exceed the annual limit (EUR 250,000 including arrival and dispatch of substances), the list must be submitted monthly. Spain's EC sales list, also known as summary statement, specifically lists customer and transaction amount information. It needs to be submitted quarterly without restrictions.
Spanish VAT refund
If a foreign company engages in taxable transactions in Spain but is unable to obtain a Spanish VAT number, or is charged local VAT on goods or services in Spain,, it can apply for a VAT refund.
The VAT refund application can be processed by the tax authorities in the country where the applicant is located.
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