Understanding the VAT for Spain
Navigating VAT numbers can seem difficult for any business, but understanding the basics is essential for doing business in Europe. In this article, we will explain what a VAT for Spain number is and why it is important, how to obtain one and how to use it correctly.
What is the VAT number?
A VAT (Value Added Tax) number is a unique 10- or 11-digit code assigned to any business that has registered for Value Added Tax in the European Union. The purpose of the VAT number is to make it easier for tax authorities and businesses to track cross-border trade transactions in goods and services. It is also used to identify in which country the purchase or sale took place, as well as other important information.
What is the NIF or CIF?
The NIF tax identification number or CIF tax identification code is precisely the VAT number.
In the past, a distinction was made between NIF for natural persons and CIF for legal persons. Now the VAT number has been unified into NIF.
NIF for natural persons
The DNI of Spanish nationals (Persona Física) is their VAT number or NIF.
The NIE of foreigners (Individuals) is their VAT number or NIF.
NIF for legal entities
For Spanish companies or entities, the initial letter of the NIF of Spanish entities will include information on their legal form:
- A Public limited companies
- B Limited liability companies
- C General partnerships
- D Limited partnerships
- E Comunidades de bienes and heredencias y yacentes and other entities without legal personality not expressly included in other codes.
- F Co-operative societies
- G Partnerships
- H Condominiums
- J Civil law partnerships
- P Local Corporations
- Q Public bodies
- R Religious congregations and institutions
- S Bodies of the State Administration and the Autonomous Regions
- U Temporary joint ventures
- V Other types not defined in the rest of the keys
Who needs to register for a VAT number?
In general, any company trading physical goods or services to other EU-based companies must register for a TIN. It is required by law, and if a company fails to register it could face heavy fines and penalties. Companies that are already registered in an EU country must show their full TIN on invoices from other countries that they send or receive as part of their business transactions.
How to obtain a VAT number?
Obtaining a VAT for Spain number is usually fairly straightforward, although it varies from one EU country to another. In most cases, businesses must apply for their VAT number or VAT registration number from the local tax authorities in the country, which requires businesses to provide the relevant business information and some basic formalities. Once a company has registered for a TIN in one country, it can use the same number in other EU countries if it does business internationally.
The NIF or CIF can be requested with the digital certificate.
Very important, you must register DNIs and NIEs that are not registered with the tax authorities in order for it to be operational as a VAT number. In other words, if you have never carried out an activity or done anything for which the tax authorities need to be informed, the tax authorities do not know you and you will have to register your DNI or NIE. This is the case for young people or foreigners.
When setting up a company, the tax authorities gives a provisional tax identification number, which is the same as the definitive NIF and at the same time the VAT number of a company NIF.
If a foreign company applies for a VAT number in Spain it will have to provide:
- Certificate from the commercial register (translated and apostilled) that the company exists.
- Power of attorney of the person representing the company
- NIE of the administrator of the company
What is the intra-community VAT number?
The intra-community VAT number is very important for companies exporting to or importing from Europe and is the same VAT number but with the letters ES in front. In England GB in front In France FR.
What is registration in the Roi Register of intra-Community operators?
If your company buys or sells products or provides services in Europe and you do not want to pay VAT, you must be registered in the ROI Intra-Community Operator Register.
The application for registration as an intra-Community trader is made using form 036 and registration can take between 1 and 3 months.
You will have to provide details of the activity you carry out, which European companies you sell to or buy from, and provide the deed or rental contract for the premises or place where you carry out the activity.
If you do not carry out any intra-community operations for 6 months, the tax agency will remove the registration in the ROI.
Ventajas de tener un número de IVA
Tener un número de IVA conlleva una serie de ventajas. El beneficio más importante es que las empresas pueden cobrar a sus clientes en otro país de la UE la cantidad requerida de IVA sobre las ventas, eliminando así cualquier responsabilidad financiera de la empresa. Se trata de una forma eficaz de simplificar y agilizar el proceso del comercio internacional.
Además, disponer de un número de IVA también da acceso a las adquisiciones intracomunitarias a tipo cero. Esto significa que las empresas pueden adquirir bienes o servicios de otros países de la UE sin pagar IVA, siempre que faciliten a su proveedor su número de registro de IVA válido.
Implicaciones de no tener un número de IVA
No tener un número de IVA válido puede tener graves implicaciones para las empresas. Las empresas pueden estar obligadas a declarar y pagar el impuesto sobre el valor añadido (IVA) en el país de venta si venden bienes o servicios a clientes de otros países de la UE.
Además, las empresas que no se hayan registrado para obtener un NIF corren el riesgo de perderse la adquisición intracomunitaria a tipo cero mencionada anteriormente. Por ello, es esencial que las empresas se aseguren de que disponen de toda la documentación necesaria (incluido un número de registro del IVA válido) antes de emprender actividades de comercio internacional.
