Obtaining a Subcontractor Certificate: What is it and what is it for?
Patrick Gordinne Perez2025-01-01T17:49:15+00:00The subcontractor’s certificate ( certificado de subcontratistas in Spanish) is a very important document in business. It serves to prove to a payer that you have no debts with the tax authorities or social security.
The subcontractors’ certificate is a key document when contracting works and services.
Many new entrepreneurs do not know what a subcontractor‘s certificate is, and when a company asks them for it, they do not know what it is and they ask us for it. of course, we very kindly get it for them quickly.
There are different types of certificates, such as positive and negative.
Each one has its specific characteristics and procedures that it is essential to know in order to carry out a correct subcontracting management.
In this article we are going to show you how to apply online for a subcontractors’ certificate on the web site of the Agencia tributaria ( the Spanish HM Revenue & Customs) , why you are asked for it and the repercussions you may face if you do not obtain it.
Contractors and subcontractors certification is very important in Spain.
The subcontractors tax certificate is an essential document if you want to contract work or provide services with another company or public entity.
Why the subcontractor certificate is so important in Spain?
For example, in the private sector, especially in our area of the Costa Blanca, there are many real estate agents.
Well, if an agent sells a new house, the builder, in order to pay the commission of the agent, will ask for the subcontractors’ certificates.
With the certificate of being up to date with the tax authorities of subcontractors, the payer will be sure that whoever he pays has no debts with the tax authorities.
Protection for the Employer
When engaging the services of a subcontractor, the main interest of the contractor is to avoid unpleasant surprises related to the contractor’s tax obligations.
The AEAT ( Spanish HM Revenue & Customs) certificate for subcontractors acts as a protection mechanism that ensures that the subcontractor is up to date with its payments to the Tax Agency.
- It minimises the risk of subsidiary liability in case of tax debts.
- It provides confidence in the contractual relationship, as the contractor can check the subcontractor’s tax situation.
- Facilitates a more responsible business culture committed to legality.
Fiscal and Legal Obligations of companies and self-employed persons
When contracting, commitments not only affect companies, but also individuals wishing to contract services.
- The contract must provide for both parties to respect their tax responsibilities during their business relationship.
- The law stipulates that non-compliance can lead to serious consequences, not only for the subcontractor, but also for the contractor.
But why did the company you are contracting with ask you for a certificate of subcontractors?
And how does the tax authorities know that I have a contract with you?
Types of current tax payment certificates for subcontractors
There are different types of certificates that can be requested in the field of subcontracting.
Each one fulfils specific functions and it is vital to know their characteristics in order to choose the right one.
Positive Certificate
A “Positive” certificate means that you are not in debt with the tax authorities and is the one that certifies that the applicant is up to date with their tax obligations.
This type of certificate is essential for those who wish to contract the services of the applicant, providing greater security in the contractual relationship.
Characteristics and Benefits
- It confirms the absence of tax debts, which gives peace of mind to the contracting party.
- It makes it easier to obtain public and private contracts, a requirement that is increasingly in demand.
- It reinforces the image and reputation of the company or professional, generating confidence among potential clients.
Negative Certificate
The negative certificate, on the other hand, is issued when the applicant has debts or has not fulfilled his tax obligations.
Why does “Negative” on the subcontractor’s certificate mean that I DO have debts?
The fact that it says “Negative” gives rise to confusion for many of our clients, because if a subcontractor’s certificate is requested that says that there are no debts.
This diagnosis allows the interested party to know the situation of their debt and to take measures to regularise it.
Procedures to settle debts
To transform a negative certificate into a positive one, the applicant must proceed as follows:
- Identify the outstanding and evaded debts.
- Submit the returns or pay the amounts due to the Tax Agency.
- Once the obligations have been remedied, the positive certificate can be applied for again.
If, however, the debt has been paid, the subcontractor’s certificate must be reapplied for.
Keeping up to date with tax obligations is crucial to avoid complications in future business relationships.
Subcontractor Certificate Application Procedure
The procedure for obtaining a subcontractor’s certificate is essential to ensure compliance with tax obligations.
This process can be done in a simple way if you know the requirements and the available application modalities.
Necessary requirements
In order to apply for the certificate, there are certain requirements that must be met.
It is essential to be up to date with tax obligations, as well as having the necessary information.
Documents and/or Allegations to be submitted
The documents required include:
- Identification document of the applicant (DNI or NIF).
- Name of the taxable person with whom you are contracting.
Again, it is important to check that you have no debts before applying for the subcontractor certificate to avoid delays in the process.
Before applying for a subcontract certificate, it is highly recommended to make sure that you have no debts.
Online application for a Subcontractor Certificate
The application system is available online, making it quick and easy for interested parties.
The application can be made from the comfort of your home or office.
Use of the Digital Certificate or Cl@ve PIN
To access the online platform for applying for the tax agency’s subcontractor certificate, it is necessary to have a digital certificate or to be registered in the Cl@ve PIN system.
These tools ensure secure identification of the applicant.
It is not possible to submit the application without one of these authentication methods.
Issuing times
Once the application has been submitted online with the digital certificate, if you have no debts, you will receive the positive certificate immediately, but if you have debts, you can expect certain response times depending on the workload of the Tax Agency.
Three to Five Working Days
The issuance of the certificate is relatively quick, with an estimated three to five working days to receive the certificate, depending on the status of the applicant’s tax obligations.
I know that if you have a deferred debt, this does not prevent you from applying for a positive subcontractor certificate.
Indeed, even if you have a debt with the tax authorities, if you have a deferred debt with the tax authorities, they consider that you do not have a debt because they have a commitment to pay you.
Validity and Renewal of the Certificate
The validity and renewal of the certificate are essential aspects to be taken into account to ensure compliance with tax obligations in the field of subcontracting.
Validity period of 12 months
The contractors’ and subcontractors’ certificate has a validity period of 12 months.
However, a lot of companies ask for holidays, subcontractors or a certificate to pay each invoice.
It stands to reason, you may have no debts today and debts tomorrow.
This time limit is crucial, as it ensures that the information presented in the certificate is up to date and reflects the fiscal status of the applicant in a reasonable time.
The date of issuance should be considered, as it is decisive in establishing whether the certificate is still valid at the time of contracting or outsourcing services.
It is important to be aware of the expiry date of the certificate.
If a professional or company wishes to continue working under the same conditions, it will be necessary to renew the certificate before it expires in order to avoid any inconvenience that may arise from not having the required documentation up to date.
Renewal Procedures
The renewal of the certificate must be carried out following a specific procedure that guarantees the continued validity of the document.
In reality, the renewal process is like requesting a new one.
This process can be simplified if followed properly.
- The first step is to access the Tax Agency website.
- It is necessary to use a digital certificate or the Cl@ve PIN system to start the renewal application.
- As with the initial obtaining, the corresponding form must be completed, verifying that all the information is correct and up to date.
- Once the application is processed, if all tax obligations are met, the new certificate can be issued immediately.
It is advisable to carry out this process in advance of the expiry date, to ensure that there are no periods without proper certificate coverage.
Keeping the renewal up to date allows for tighter control over tax obligations and avoids unpleasant surprises related to possible tax debts.
Tax Liabilities of Contractors and Subcontractors
Tax responsibilities are crucial to ensure proper compliance with tax obligations in procurement.
Both contractors and subcontractors should be clear about their duties and the possible repercussions of non-compliance with these obligations.
Contractor Tax Obligations
Contractors are responsible for keeping up to date with their tax obligations, including:
- Filing their tax returns on time.
- Pay the taxes corresponding to their activities, such as VAT and personal income tax.
- Keep and manage the documentation supporting your operations.
- Ensure that subcontractors also comply with their tax obligations.
Compliance with these obligations is essential, as it builds trust with clients and avoids future legal problems.
A contractor who complies with his tax responsibilities not only protects his professional reputation, but also enhances his profile with regard to potential contracts.
Consequences of non-compliance
Failure to comply with tax obligations can have serious repercussions for both contractors and subcontractors.
Consequences include:
- Financial penalties set by the Tax Agency.
- Possible surcharges and interest for late payments.
- Subsidiary liability which may result in the contractor assuming the tax debts of the contractor.
- Restrictions on the ability to obtain new contracts due to the lack of a positive certificate.
Therefore, both contractors and subcontractors must keep a close eye on their tax obligations.
This diligence not only allows them to avoid penalties, but also to consolidate relationships of trust in the business environment.
The certificate of being up to date with the tax and social security authorities is a key document that certifies the tax and contribution situation of a company or professional.
This certificate is necessary to guarantee compliance with legal and tax obligations before the public administrations.
Utility of Certificates in Contract Management
Finally, I can only say that contractor and subcontractor certificates play an essential role in contract management, ensuring that the parties involved are aligned with current tax and legal regulations.
This practice establishes a relationship of trust between contractors and contractors.
Factors to Consider when Contracting
When selecting a subcontractor, it is crucial to consider several factors that may influence the contractual relationship:
- Financial Status: Verifying that the subcontractor is current with its tax obligations is critical to avoid unexpected liabilities.
- Compliance History: Researching the subcontractor’s compliance history can prevent future issues.
- Certification: Requesting certification ensures that the subcontractor is in good tax standing, which increases the security of the contractor.
- Transparency in the Relationship: Requiring this type of certification fosters a clear and professional environment in contract management.
Benefits for Contracting Companies
Companies that maintain their certificates in good standing also benefit in a number of ways. The main benefits include:
- Access to Projects: Many organisations require the presentation of such certificates as a condition for participating in tenders and contracts.
- Improved Corporate Image: Having a positive certificate highlights the company’s fiscal responsibility, which can attract more customers.
- Reduced Legal Risks: Being up to date with tax obligations reduces the risk of future lawsuits or legal requirements from the Tax Agency.
- Increased Business Relationships: Certification generates trust between the parties, facilitating the establishment of new collaborations and strategic alliances.