VAT (Value Added Tax) is a key aspect in the fiscal management of any business that sells products, both nationally and internationally. In this article, we explain in a practical way how to properly apply VAT according to the type of customer and the destination of sales: final consumers in Spain, in other European Union countries, or outside the EU. Additionally, we detail the thresholds, registration obligations, and tax forms that you should know to comply with regulations and avoid common errors in invoicing and declaring this tax.
1. Sales to individuals in Spain
- Application of Spanish VAT: For sales to final consumers within Spain, you must apply the VAT rate corresponding to the products you offer (typically 21%, but not always).
- Periodic declarations: It is mandatory to submit quarterly self-assessments using form 303, and the annual summary with form 390 (in January).
2. Sales to individuals in the European Union (EU)
- Threshold of €10,000 annually: If your sales to final consumers in other EU countries exceed a total of €10,000 annually, you must apply the VAT of the destination country and pay it to the tax administration corresponding to the buyer.
- Registration in the One-Stop Shop scheme (OSS): To simplify VAT management in various EU countries, you can register in the OSS scheme through the Spanish Tax Agency. This allows you to declare and pay VAT for all EU countries in a single place.
EU Summary:
| Sale of goods | TYPE OF BUYER | |
| Business or self-employed | Individual | |
| You don’t have to charge VAT (reverse charge mechanism) | Up to €10,000: Spanish VAT | |
| Over €10,000: VAT of your client’s country | ||
3. Sales to countries outside the EU (USA, United Kingdom, etc.)
- VAT-exempt exports: Sales to consumers outside the EU are considered exports and are exempt from VAT in Spain.
- Customs management: It is necessary to issue a detailed commercial invoice and manage the corresponding customs procedures. Customers (the buyers) may be subject to taxes and fees, but in the destination country.
But be careful, everything mentioned so far requires one prerequisite, otherwise the intra-community VAT rules could not be applied.
The essential requirement is the following: you must be part of the Register of Intra-Community Operators (or ROI).
And there is a second requirement: this must be fulfilled by your client or supplier, that is, they must also be registered in the ROI (unless it is an individual customer).
The ROI, as its acronym indicates, is a census of professionals and companies that carry out intra-community operations. Each operator must apply for incorporation in the tax authority of their country (the Tax Agency or AEAT in Spain).
It is a relatively simple procedure: You must request your incorporation into the ROI by submitting form 036 (form 037 is not valid):
- Check box 582 (to request registration in the ROI).
- Indicate in box 584 the date on which you expect to carry out your first intra-community operation.
If all goes well, the AEAT will assign you an intra-community tax identification number (it usually takes a few days to assign it, it’s very quick), also known as VAT number.
Generally, the VAT number is formed by your NIF number with the ES prefix (for example, ESB36112233 -SL- or ES36445566P –self-employed person-).
So, as we can verify, having a VAT number is essential, but it’s also essential for your client when they are a self-employed person or company, because if they don’t have one, you should invoice your sales with (Spanish) VAT. How can you check if your client company has a VAT number? You can easily consult it in the VIES, or VAT Information Exchange System. The VIES is a search engine for intra-community VAT, which allows you to make your verifications, you just have to access the European Commission’s VIES VAT number validation webpage.
Don’t hesitate and request the free advisory services of the Economic Office of Galicia and an expert will contact you.
