What is the famous “tax clearance certificate” and why is it so important in Spain?

Indeed, proving that you meet your tax obligations is essential in adult life – we don’t want any trouble with the dreaded tax office! And to back it all up, there’s the certificate in Spain that you’re up to date with your tax payments. This tax clearance certificate is called in Spain a “certificado de estar al corriente en hacienda”.

This little piece of tax paper, issued by the Spanish tax authorities themselves, is used to check whether taxpayers are up to date with their payments… or whether they are in the red.

Pay close attention to the results of the tax clearance certificate:

• If the result of the certificate is positive: it certifies that the person or company is an exemplary citizen and that they are up to date with all their obligations and have no debts with the Spanish tax authorities.
• If the certificate is negative: Oops! There’s a problem. You may have unpaid debts or you may not have filed one or two tax returns. In short, you need to sort it out as quickly as possible.

And surprise! This tax clearance certificate is valid for 12 months from the date of issue. Did you think it would be valid forever? Well no, my friends. However, you always have the option of requesting a change if something doesn’t add up.

And now for the million-dollar question:

When do you need this update certificate from the tax authorities?

To access grants and subsidies, both national and regional! To collect invoices, to apply for a bank loan, etc. In fact, today you need this certificate for almost everything if you have a business and you want money.

Because we already know that help is never a bad thing, let’s get to work, people!

Want to prove that you’re the king of transparency and compliance?

Then it’s time to get your tax clearance certificate. Whether you want to sign contracts with suppliers, take part in tenders or simply feel good about yourself, you can apply for it electronically or in person at the tax office.

And don’t forget your social security certificate.

With these documents in hand, no one will be able to say that you’re not a true professional when it comes to your tax obligations!

Certificate of good standing for companies in insolvency proceedings

Companies undergoing insolvency proceedings find it difficult to be subcontracted, as they cannot prove to their principals that they are up to date with their tax obligations.

Since the tax authorities can then claim the subcontractor’s tax debts (VAT and withholding tax on subcontracted work) from the subcontracting company, the latter ends up contracting with another company.

To avoid this additional disadvantage for companies in insolvency proceedings, the tax authorities do not require subcontractors to be liable, provided the following conditions are met:

Companies in insolvency proceedings must also apply to the tax authorities for a certificate stating that they are up to date with their tax debts.

This certificate (which will be refused) must be less than twelve months old at the date of payment.

Payment by the contractor must be made at the request of the judge or the insolvency administration.

Persons subcontracting with companies in insolvency proceedings are not liable for the tax debts of the latter, provided they meet certain conditions.

How and where can I request an updated AEAT tax certificate?

If your company ever needs to apply for a certificate stating that it has no tax debts (because it needs one to subcontract work, apply for a grant, etc.), you should know that you can apply for it on the http://www.aeat.es website (under the “tax certificates” heading). Don’t forget that you’ll need a digital certificate.

Don’t forget either:

Even if you have a deferred tax debt or one paid by instalments, the certificate must be positive (because your company is paying the debt within the time allowed by the Tax Authorities).

However, in these cases, and to avoid delays in obtaining the certificate, attach a copy of the receipt certifying payment of the final instalment of the deferment.

Important

Deferments are debited from the debtor’s account on the 5th and 20th of each month, and it takes around 15 days for the tax authorities to receive proof of payment. It is therefore possible that, at the time you apply for the certificate, the tax authorities do not have proof of the last payment and will issue you with a negative certificate (or inform you that the issue of the certificate requires prior examination).

Applying for a certificate of non tax debt

Once you have applied for the certificate, go to the “reply to the application, make allegations and/or provide the document(s) associated with the application reference” section and attach a copy of the last tax invoice (indicating the reference number obtained when the application was submitted).

You can request the certificate of good standing from the tax authorities yourself. However, if you have deferred or split debts, attach the receipt for payment of the last instalment of the deferment.

If you do not have a digital certificate, the certificate of good standing with the tax authorities will be sent to your postal address, but please note that it must be the postal address you have with the tax authorities. If you have changed your address and have not informed the tax authorities of this change, you will never receive the certificate of up-to-dateness with the tax authorities.

Do I need to apply for a tax clearance certificate if I work in the construction sector?

In general, you always do, but when your company has been commissioned to carry out a construction project, it may have subcontracted part of the project to another company.

In this case, you would ask the subcontractor to provide a certificate from the tax authorities stating that they are up to date with their tax obligations.

Liability

You’re doing the right thing, otherwise (if you don’t require this certificate) you could be held liable to the tax authorities (in the event of non-payment by the subcontractor), for example, for the deductions that the subcontracting company has to make from the workers assigned to the work.

Suppliers

But what about suppliers of materials? If you hire them to supply materials, do you also have to ask them for a certificate from the tax authorities?

In this case, the tax certificate is not necessary. However, this subsidiary liability of the contractor for the obligations of the subcontractor does not apply to the supply of materials, so in this case the supplier (if he is only supplying the materials and not installing them) is not obliged to provide you with this certificate.

In fact, this liability applies to companies that subcontract the execution of works or the provision of services, whereas in the case of the supply of materials, it is neither of these two, but simply the delivery of goods.

The supplier of materials is not required to provide the contractor with a certificate stating that he is up to date with his tax obligations.