Worldwide VAT, GST and Sales Tax Guide
Madrid
EY
Calle Raimundo Fernández Villaverde, 63-65 Torre Azca 28003 Madrid
Spain
Indirect tax contacts
Eduardo Verdún +34 915 727 421 eduardo.verdunfraile@es.ey.com
Hugo Gonzalez +34915725139 hugoantonio.gonzalezcollazo@es.ey.com
Silvia Bermudo +34 915-727-749 silvia.bermudoconde@es.ey.com
Barcelona
EY
Avda. de Sarriá, 102-106
Edificio Sarriá Fórum 08017 Barcelona
Spain
Indirect tax contacts
María Lorente
+34 933 663 763 maria.lorentelranzo@es.ey.com
Íñigo Hernández +34 933-666-537 inigo.hernandezzmoneo@es.ey.com
Sevilla
EY
Avenida de la Palmera, 33 41013 Sevilla
Spain
Indirect tax contacts
Pedro Gonzalez-Gaggero +34 915 727 419 pedro.gonzalez-gaggero@es.ey.com
Navarra
EY
Avenida de Pío XII, 22 31008 Pamplona
Spain
Indirect tax contact
Alberto Arteaga +34 948 179 357 alberto.arteagafernandez@es.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Impuesto sobre el Valor Añadido (IVA)
Date introduced 1 January 1986
Trading bloc membership European Union (EU)
Administered by Ministry of Finance (http://www.aeat.es and http://www.hacienda.gob.es )
VAT rates
Standard
Reduced
Other
21%
2%, 4%, 5%, 7.5%, 10%
Zero-rated (0%) and exempt VAT
C or W – 1 2 3 4 5 6 7 C (in the case of permanent establishment) (ES prefix must be added if the taxable person is included in the VAT Information Exchange System [VIES] census)
VAT return periods
Thresholds
Registration
Established
Non-established
Distance selling
Intra-Community acquisitions
Electronically supplied services
Monthly (if turnover exceeded EUR6,010,121.04 in the preceding year, or if the taxable person is included in the monthly VAT refund procedure, or if the company is included in a VAT group or if the company applies for the ISI system) Quarterly
Annual statement (required for taxable persons not applying ISI system)
None
None
EUR10,000
None
EUR10,000
Recovery of VAT by non-established businesses Yes, subject to certain conditions
B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods or services made in Spain by a taxable person
• The intra-Community acquisition of goods from another European Union (EU) Member State by a taxable person (see the EU chapter)
• The importation of goods from outside the EU, regardless of the status of the importer
• Reverse charge on goods and services received by a taxable person in Spain
For VAT purposes, the territory of Spain excludes the Canary Islands, Ceuta and Melilla.
Quick Fixes. Pending introduction of a “definitive” system for the VAT treatment of intra-Community supplies of goods to taxable persons, the EU has adopted Quick Fixes for intra-Community trade in goods. For an overview of the Quick Fixes rules, see the EU chapter. For
• However, if B communicates to A a Spanish VAT ID number, the transport will be linked to the supply performed by B and the supply A-B will be a domestic supply – B will be considered the party performing the VAT exempt intra-EU supply to party C.
VAT number of the recipient of an intra-EU delivery of goods. As per the implementation of this Quick Fix, to consider an intra-EU supply of goods exempt, the following requirements should be met:
• The goods should be transported to another Member State.
• The recipient of the goods should have a VAT number granted by the authorities of a Member State other than Spain and must communicate it to the seller.
• The supplier should include the VAT number of the recipient in its EU sales list (Form 349).
Proof of transportation. The Spanish VAT Regulation envisages that any means of evidence admitted by law is valid (i.e., the principle of freedom of evidence). Particularly, the means of evidence envisaged in Article 45 of the Council Implementing Regulation 282/2011 (there is a direct reference of the Spanish VAT Regulation). The Spanish VAT law does not specify any other document. As per the principle of freedom of evidence, any type of document that provides enough evidence of such transport will be acceptable. However, it would be advisable to use the documents established in the EU Regulation, since these will be presumed as valid, providing legal certainty. Also, means of evidence different from the above could draw the attention of the authorities and even their reluctance to accept them.
Consequently, according to the EU Regulation to apply for the exemption in the intra-EU delivery of goods, the transport should be proven by the following means:
• If the transport is carried out by the vendor, it should have at least two noncontradictory means of proof from the list below.
• If the transport is carried out by the acquirer, the vendor should have (i) a statement whereby the acquirer certifies the transport of the goods and (ii) at least two noncontradictory means of proof from the list below.
The allowed means of proofs are the following:
• Documents related to the delivery of the goods, such as a CMR (Convenio relativo al Contrato de Transporte Internacional de Mercancías por Carretera; or Convention on the Contract for the International Carriage of Goods by Road), bill of lading, freight invoice or an invoice of the carrier
• An insurance policy or any bank document that proves the payment of the transportation.
• Documents issued by public bodies that certificate the arrival of the goods in the destination Member State
• Receipt from the depositary of the goods in the destination Member State
Effective use and enjoyment. To avoid instances of non-taxation or double taxation, EU Member States can apply use and enjoyment rules that allow a service that is “used and enjoyed” in the EU to be taxed or prevent a service that is “used and enjoyed” outside the EU from being taxed. If a service is taxed in the EU under the use and enjoyment provisions, a non-EU supplier of the service may be required to register for VAT in every Member State where it has customers that are not taxable persons. For information regarding the rules relating to VAT registration, see chapters on the respective EU countries.
The Spanish VAT law envisages that certain services should be subject to Spanish VAT if their effective utilization or exploitation were to take place within the Spanish VAT territory. The services impacted by the use and enjoyment rules are the following (Article 70 of the Spanish VAT Law has been amended by Law 31/2022 as of 1 December 2023, and Law 13/2023 as of 1 May 2024, to modify the scope of the use and enjoyment rule):
• B2B and B2C services: the leasing of means of transport
• B2C services:
– Transfers and concessions of copyrights, patents, licences, trademarks or commercial brands and the rest of intellectual property or industrial rights, as well as any other similar rights
– Transfer or concession of goodwill, exclusive right to trade or perform professional activities
– Advertising services
– The services of consultants, auditors, engineers, consultancy bureaus, lawyers, accountants or tax experts and other similar services
– Data processing and supply of information, including procedures and experiences of a commercial nature
– Translators, proofreading and editing, as well as those provided by interpreters
– Insurance, reinsurance and capitalization transactions, as well as financial services
– Provision of staff
– Movie dubbing services
– Hiring out of movable tangible property
– Services of access to the natural gas or electricity distribution systems, transport or delivery of gas or electricity through such systems, as well as the provision of other services directly related to any of the services included in this paragraph
– Obligations to refrain from providing, wholly or partially, any of the services mentioned in this list
Transfer of a going concern. In accordance with Article 7.1 of the Spanish VAT law, a transaction consisting of a transfer of going concern (TOGC) will not be subject to VAT provided that certain requirements are met: “Not subject to Spanish VAT will be the transfer of a group of tangible and, if applicable, intangible elements which, comprising the taxable person’s business or professional assets, constitute an autonomous economic unit for the transferor, capable of developing a business or professional activity by itself, regardless of the tax regime applicable for other taxes purposes and for paragraph four of Article 4 of this law.”
In this regard, the GDT has further defined, based on the Court of Justice of the European Union’s criteria, that to consider a TOGC as not subject for VAT it is not necessary that all assets and liabilities of a whole company are transferred, but that the elements transferred are indeed capable of developing a business or a professional activity, as an autonomous unit.
The main requirements to determine whether or not the TOGC relief would apply could be summarized as follows:
• The assets transferred must constitute an autonomous economic unit for the transferor
• The economic autonomous unit must be capable of developing an economic activity by its owns means
• The assets/liabilities transferred must include a minimum organizational structure in terms of material and/or human resources
• The acquirer should affect or intend to affect said assets/liabilities transferred to the performance of a business activity
Transactions between related parties. For a transaction between related parties, the value for VAT purposes is calculated as the market value of the goods delivered or services provided.
C. Who is liable
A “taxable person” is any business entity or individual that makes taxable supplies of goods or services, intra-Community acquisitions, imports or distance sales in the course of a business in Spain.
No VAT registration threshold applies in Spain. A taxable person that begins its activity must notify the VAT authorities of its liability to register before the beginning of its activities.
digital certificate to access their notifications or appoint a local representative to receive the notifications on a company’s behalf.
A fiscal representative is no longer compulsory when an EU company is going to be registered for VAT in Spain. However, a fiscal representative is required for non-EU companies. The fiscal representative must be tax registered and willing to act as the local tax representative of the company, managing queries and filing obligations of the company for dealings with the tax authorities.
Reverse charge. The reverse-charge mechanism generally applies to supplies made by nonestablished businesses to taxable persons. Under this mechanism, the taxable person is the recipient of the goods or services supplied.
If a foreign taxable person supplies goods to a company established in Spain, the recipient of the supply becomes liable for VAT purposes. However, the reverse-charge mechanism does not apply to certain items, including the following:
• Distance sales
• Exempt exports
• Exempt intra-Community supplies
The reverse-charge mechanism also applies if a foreign taxable person supplies goods in Spain to another foreign taxable person.
If a foreign taxable person supplies services to a company established in Spain, the company established in Spain is treated as the taxpayer.
If a foreign taxable person supplies services subject to Spanish VAT to another foreign taxable person, in general, the supplier is liable for the VAT due.
Domestic reverse charge. Apart from the cases described above, the reverse charge also applies to the following domestic transactions in Spain:
• Supplies of certain kinds of gold and gold-processed products, silver, platinum and palladium
• Supplies of certain wastes from iron, paper or glass industries
• Supplies of services related to rights on greenhouse gases
• Supplies of immovable property on the frame of insolvency proceedings, warranty executions or exempt supplies of immovable property when the exemption is waived
• Work executions
• Supplies mobile phones, video game consoles, tablets and laptops
• Supply of plastic and textile waste
Digital economy. Specific VAT rules apply to cross-border supplies of goods and services sold via the internet (i.e., e-commerce) in all EU Member States with effect from 1 July 2021. These new rules apply to all direct sales to nontaxable persons (in practice, these are mostly private individuals), but we refer to these rules as e-commerce VAT rules because most of these transactions are conducted via the internet. In general, the place of supply is in the country of consumption, i.e., where the goods are shipped to or where the buyer of the goods or services resides, subject to any “use and enjoyment” provisions that may override this rule (see the Section B. Effective use and enjoyment subsection above). Therefore:
• For supplies of services made by a nonresident supplier to a business customer (B2B), the business customer is responsible for accounting for the VAT due, using the reverse charge.
• For supplies of goods made by a nonresident supplier to a business customer (B2B), where the goods are transported from another EU Member State, the business purchasing the goods is responsible for accounting for the VAT due, as an intra-Community acquisition. If the goods come from outside the EU, the purchaser may have to report an importation of goods.
by the Spanish tax authorities in connection with the registration of nonresident entities; although this obligation could be argued according to law (it is not required according to the wording of the VAT law currently in force), the Spanish tax authorities are refusing to register nonresident entities without the ID numbers of their representatives
• Census forms (i.e., Forms 036-030)
In principle, the registration should be performed before the commencement of the economic activity in Spain. Once all the necessary information is gathered, the registration should be obtained on the same day that the registration return (Form 036) is filed. The common procedure is to provide the documentation in person to the tax authorities.
Deregistration. To deregister for VAT purposes, the taxable person must submit online, a census return (Form 036) to the Spanish tax authorities.
Deregistering from the census as a professional entrepreneur involves more, as it cancels the tax identification number. The same census return (Form 036) is submitted in the same way, but it must be accompanied by additional documentation.
Changes to VAT registration details. Changes related to the company information, such as business address, corporate form, application to special VAT regimes, etc., should be informed to the tax authority. Generally, the communication should be processed through the electronic filing of a census return (Form 036) within one month of its occurrence.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT.
The VAT rates are:
• Standard rate: 21%
• Reduced rates: 2%, 4%, 5%, 7.5%, 10%
• Zero-rate: 0%
The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for a reduced rate or an exemption.
In the period from October 2024 to 31 December 2024, special reduced rates of 2% and 7.5% also applied. At the time of preparing this chapter, these rates had not been extended into 2025 and no other potential reduced rates had been published.
Examples of goods and services taxable at 2%
• Basic foodstuffs (this is a special reduced rate in effect until 31 December 2024)
– Common bread, as well as frozen common bread dough and frozen common bread intended exclusively to produce common bread
– Bread-making flours
– The following types of milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered
– Cheeses
– Eggs
– Fruits, vegetables, legumes, tubers and cereals, which have the condition of natural products in accordance with the Food Code and the dispositions dictated for its development
Examples of goods and services taxable at 4%
• Books, journals and magazines
• Pharmaceutical products for humans
• Certain goods and services for handicapped persons
• Business gifts (unless of very low value)
• Alcohol and tobacco
• Private expenditure
Examples of items for which input tax is deductible (if related to a taxable business use)
• 50% of purchase, hiring, leasing, maintenance and fuel for cars, vans and trucks (a higher percentage of deduction is allowed if the taxable person provides to the authorities the evidence proving that the percentage of time used for business purposes exceeds 50%)
• Attending conferences, seminars and training courses
• Advertising
• Business use of home telephone or mobile phone
• 50% of parking
• Taxis, restaurant meals, hotel accommodation and travel expenses if the expense is allowable under the Spanish income tax or corporate tax law or if the taxable person has the appropriate documentation (generally, an invoice)
Partial exemption. Input tax directly related to the making of exempt supplies is, as a rule, not recoverable. If a Spanish taxable person makes both exempt and taxable supplies, it may not recover input tax in full. The amount of input tax that a partially exempt business may recover is calculated using the general pro rata method or the direct allocation method. The general pro rata method is usually used unless the taxable person chooses the direct allocation method. However, the direct allocation method must be used if the general pro rata method provides a VAT recovery amount that exceeds by 10% or more the amount of input tax recoverable using the direct allocation method.
General pro rata method. The general pro rata method is based on the ratio of taxable turnover and total turnover during the calendar year. Because the taxable person cannot know its annual ratio for the current calendar year when filing its periodic VAT returns, the pro rata percentage for the preceding year or an agreed provisional percentage is used. The calculation is regularized in the last period of the VAT year (i.e., the actual figures for the year are calculated and applied and any further adjustment is made).
Direct allocation method. The direct allocation method consists of the following two-stage calculation:
• In the first stage, the taxable person must distinguish between input tax that corresponds to taxable and to exempt supplies. Input tax directly allocated to taxable supplies is deductible, while input tax directly related to exempt supplies is not deductible.
• The remaining input tax that is not allocated directly to exempt and taxable supplies is apportioned using the general pro rata method. The recovery percentage is rounded up to the nearest whole number (e.g., a percentage of 16.3% is rounded up to 17%).
• Taxable persons can opt for the direct allocation method in December of the current year. That method is then applied to the deductions for that whole year and in the following two years.
Deductions in different sectors. If a taxable person undertakes activities in different economic sectors, it must apply different methods to calculate the partial exemption deduction for each sector, as if each economic activity were carried out by an independent business. This rule applies if the business undertakes activities that are subject to different pro rata recovery percentages. A business is deemed to undertake such activities in the following circumstances:
• The activities fall under different groups according to the national classification of economic activities.
• The pro rata percentage for VAT recovery for one economic sector of the business differs by more than 50 percentage points (either higher or lower) from another sector of the business.
If goods or services are used in one of the distinct economic sectors, the VAT paid is recovered according to the pro rata recovery percentage for that sector. However, if goods or services are used by more than one economic sector, the amount of VAT recovered must be based on the general pro rata method.
For the direct allocation method (i.e., the standard partial exemption method), if the application of this method is compulsory because the 10% requirement is exceeded (as per the details outlined above), in the last VAT return of the calendar year (i.e., the December period), the taxable person must indicate the application of this regime and present a census form informing the tax authorities of the application.
For the special methods, i.e., the different sector methods, where goods or services are used in one of the distant economic sectors, the pro rata recovery percentage for that sector must be used. These methods are mandatory, and as such taxable persons are not required to submit a census form reporting to the tax authorities of its application.
Capital goods. Capital goods are items of capital expenditure that are used in a business over one year and that have an acquisition price exceeding EUR3,005.06. Input tax is deducted in the VAT year in which the goods are acquired and first used. The amount of input tax recovered depends on the taxable person’s pro rata recovery percentage in the VAT year of acquisition and first use. However, the amount of input tax recovered for capital goods must be adjusted over time if the taxable person’s pro rata recovery percentage differs by 10 percentage points during the adjustment period or if the goods are transferred or sold during the adjustment period.
In Spain, the capital goods adjustment applies to the following assets for the number of years indicated:
• Immovable property: adjusted for a period of 10 years (the year of the acquisition and first use and the following nine calendar years)
• Movable property: adjusted for a period of five years (the year of the acquisition and first use and the following four calendar years)
The adjustment is applied each year following the year of acquisition and first use, to a fraction of the total input tax (1/10 for immovable property and 1/5 for other movable capital goods). The adjustment may result in either an increase or a decrease of deductible input tax, depending on whether the ratio of taxable supplies made by the business increases or decreases, compared with the year in which the capital goods were acquired and first used. In Spain, the capital goods adjustment does not apply to any services.
Refunds. If the amount of input tax recoverable exceeds the amount of output tax payable, a refund may be claimed. A business may choose to request a refund of the excess VAT or to carry it forward to offset output tax in the following four years.
Two different procedures are available with respect to applications for refund of the excess input tax. These procedures are summarized below.
General procedure. Under the general procedure, the taxable person may only apply for the refund in the last VAT return of the year (monthly or quarterly). The tax authorities have a sixmonth period beginning on the date of the application to analyze whether the taxable person has the right to obtain the refund. After such term is exceeded, delay interest on the refund due is payable to the taxable person.
Special procedure. Under the special procedure, the taxable person may apply for inclusion in the monthly VAT refund census. Taxable persons included in such a census may apply for the VAT refund in each monthly VAT return. The tax authorities have a six-month period beginning on the date of the application to analyze whether the taxable person has the right to obtain the
The timeline for the approval and publishing of the implementing regulation has been delayed and there is no certainty on when this will be published.
The new obligation has two main objectives. First, it aims to combat late payments in commercial transactions. Second, it seeks to promote the digitalization of Spanish companies, especially smaller ones. Under the new requirement, all invoices must be submitted to a public e-invoicing solution, providing details on their content and status. This will enable the Spanish tax authorities to monitor payment deadlines.
The new Spanish e-invoicing system will operate through:
• Private e-invoice platforms that are required to meet the requirements set out in the implementing regulation.
• A public e-invoicing solution that will be run by the Spanish tax authorities (Agencia Estatal de Administración Tributaria).
Companies and professionals must issue, send and receive the B2B e-invoices through the private e-invoicing platforms, the public e-invoicing solution or a combination of both. If the exchange of the e-invoices takes place directly between private e-invoice platforms, an automatically generated copy of each e-invoice must be submitted to the public e-invoicing solution. The public e-invoicing solution will become an e-invoice repository that will (i) allow the Spanish tax authorities to monitor the e-invoices´ content and status, and (ii) entitle the e-invoicing recipients to check the received e-invoices via the public e-invoicing solution.
Companies and professionals affected by the new e-invoicing obligation are primarily those who are Spanish-based or have a permanent established in Spain intervening in the B2B transaction. Some exclusions are provided for certain types of invoices. The draft implementing regulation details the semantic data model of the core elements of the e-invoice and the list of syntaxes allowed. Private e-invoice platform operators will be obliged to interconnect with any other private e-invoice platforms and accept all interconnection requests. Under client permission, operators might use the public electronic invoicing solution to interconnect.
The recipients of the e-invoices must inform issuers of the following invoice statuses:
• Commercial acceptance or rejection of the invoice and associated date
• Full effective payment of the invoice and associated date; companies obliged to comply with the Spanish electronic VAT books (SII 1 system) must process the effective payment and associated date through an SII book of received invoices within a very tight four-day timeframe
The implementing regulation sets out the technical requirements to be met by the private e-invoice platforms.
Lastly, the Spanish tax authorities will develop a free e-form, which will enable small businesses and professionals to generate the e-invoices and send them to recipients and the Spanish tax authorities under certain circumstances.
The Immediate Submission of Information (ISI) (Suministro Inmediato de Información [SII]) system moves from a system that has been in place for the last 30 years to a new system whereby VAT books are registered with the electronic office of the Spanish tax authorities by supplying invoice information on an almost immediate basis. Companies will be required to keep VAT books with the electronic office of the Spanish tax authorities, by electronically providing invoice details. In this regard, companies are required to send the Spanish tax authorities their invoice data and the Spanish tax authorities will use this information to configure the different VAT books of the company in real time.
In addition, the Spanish tax authorities will use the ISI system to cross-check in real-time the information provided by suppliers and clients. Therefore, discrepancies between information provided by the company and information provided by third parties should be avoided, as they
Monthly VAT returns must be submitted by the 20th day of the month following the month of the assessment.
Quarterly VAT returns must be submitted by the 20th day of the month following the end of the quarter for the first three calendar quarters and by 30 January of the following year for the last calendar quarter.
Periodic payments. For monthly VAT returns, full payment of the VAT due must be made by the 30th day of the month following the month of the assessment.
For quarterly VAT returns, full payment of the VAT due must be made by the 20th day of the month following the end of the quarter for the first three calendar quarters and by the 30th day of the month following the end of the fourth (and last) calendar quarter (i.e., 30 January).
Whether the VAT return results in a credit position, the taxable person should proceed with the payment to submit the VAT return. In this sense, there are some alternatives:
• The payment can be made through direct debit in a Spanish bank account of the taxable person. In those cases, the VAT return needs to be submitted at least five days before the end of each reporting period.
• The payment can be also made by using the Spanish bank account of the taxable person or even by using a debit card of the company from a Spanish bank account.
• If the company does not have a Spanish bank account, the payment could be done:
– By a third party with a Spanish bank account
– Through the procedure of “recognition of tax debt” and making a transfer to the bank of the authorities – this is a special procedure
Electronic filing. Electronic filing is mandatory in Spain for all taxable persons. A VAT return (Form 303) and the Informative Annual Summary VAT return (Form 390) must be filed through electronic means by using an electronic signature owned by the taxable person or a third party duly empowered. When a VAT return (Form 303) results in amounts to be paid, a Spanish bank account number is required.
Payments on account. Payments on account are not required in Spain.
Special schemes. Travel agencies. There is a special scheme for travel agencies that includes, among others, the opt-out possibility in connection with B2B supplies where the normal VAT regime could be applied.
Cash accounting. Under the cash accounting scheme, taxable persons report the VAT charged on sales of goods or supply of services on the date when the payment is received and the right to deduct input tax arises when payment is made. The scheme is optional and is subject to certain requirements.
Simplified regime. The simplified regime allows taxable persons to determine the payable amount on the basis of certain indexes, modules and other parameters. This regime can only be applied by individuals and some other entities conducting certain activities envisaged by the law.
Farming, agriculture and fishing. Under this regime, taxable persons are not obliged to charge VAT for their sales and do not have the right to deduct the input tax borne in the purchases. Additionally, taxable persons are released from most of the formal obligations.
Secondhand, art and antique goods. The special system for secondhand goods is a type of VAT system, applied voluntarily to resellers when acting in their own name and supplying the goods referred to above. These supplies will be charged with VAT by applying the corresponding tax rate on a taxable basis, which will be the profit margin obtained in each transaction.
The penalty for late or incorrect Intrastat filings depends on the level of infringement. Penalties range from EUR60 to EUR30,050.
Penalties may be imposed for late, missing or inaccurate ESLs.
Penalties for ISI. Potential penalties that the Spanish tax authorities can impose for not complying with the ISI submission correctly:
• Lack of ISI submission – 1% of the turnover: in the case of failing in the obligation to keep the VAT books of invoices through the ISI, the authorities can impose a penalty consisting of 1% of the turnover, with a minimum of EUR600 and without maximum.
• Delay in the ISI reporting – 0.5% of the invoice: the delay in the submission of data in the ISI might imply the imposition of a proportional pecuniary fine of 0.5% of the amount of the relevant invoice, with a minimum of EUR300 per quarter and a maximum of EUR6,000. This penalty may apply when the legal deadlines for reporting the invoices have been surpassed. The deadline for reporting the invoices is four working days as from the issuance date (in the case of AR invoices) or posting date (in the case of AP invoices), and in any case before the 16th of the following month.
• Inaccuracy or omission of transactions – 1% of the invoice: in the case of inaccuracy or omission of transactions (e.g., invoices ISI reported but not correctly), the penalty would be 1% of the amount of the transactions recorded incorrectly, with a minimum of EUR150 and a maximum of EUR6,000.
Penalties for errors. The penalties for errors in VAT returns depend on whether mistakes have caused economic damage to the tax administration or not. If no economic damage has been produced, the penalty for late filing amounts to EUR200, while the penalty for incorrect filing amounts to EUR150. If an error has caused economic damage to the tax authorities (e.g., the taxable person indicates a lower amount of output/payable VAT) the penalty amounts to 50% of the unpaid amount.
For these penalties, an error means any inaccuracy or incorrect data indicated in the VAT returns or any VAT statement to be filed by taxable persons.
There are no specific penalties associated with the late notification or failure to notify the tax authorities of changes to a taxable person’s VAT registration details. For further details, see the subsection Changes to VAT registration details above.
Penalties for fraud. Under the Spanish General Tax law, the use of fraudulent means makes any infringement to qualify very severe. In such a case, the applicable penalty related to a particular infringement is considerably increased.
Personal liability for company officers. Company directors can be held liable for the tax debts of a company when, acting on purpose or even negligently, they have not performed the necessary acts to comply with tax requirements or they have agreed with not complying them. Furthermore, in certain cases, they can be held responsible for the penalties imposed on the company.
Statute of limitations. The statute of limitations in Spain is four years. This means that the tax authorities cannot review or assess VAT four years after of the VAT liquidation period or four years after of the moment of the infraction. If such period is interrupted according to the rules mentioned in this section, the four-year period of the statute of limitation calculation is re-initiated as from the interruption date.