Category: French tax

VAT compliance for non-resident companies

Spanish VAT registration of a foreign company involves registering the company with the Spanish Tax Office (Agencia Tributaria), and obtaining a Spanish tax code (NIF).

Documentation required

It is necessary to supply the following documents.

1. A certificate produced by the Company Registry in the country where your company was incorporated. This document should state the registered address of the company, and a list of directors.
2. A Power of Attorney document, the draft provided by us, to be signed by your company director before a Notary. This allows us to obtain your Spanish tax code (NIF) on your behalf and request your VAT registration with the Tax Office.

All documents should be legalised in your country with the Hague Apostille and translated into Spanish by a sworn translator if necessary. We will provide the Power of Attorney documents in both Spanish and English so in the event that you can find a local Spanish-speaking Notary, there will be no translation necessary for these.

We can also provide a sworn Spanish translation service at this end for a reasonable charge. We offer this service for several source languages including English and French.

Our charges

Our current charge for the VAT registration of your company is 350 Euros.

This includes the following:

1. Drawing up the draft Power of Attorney and tax representation documents;
2. Obtaining a tax code (NIF) for your company;
3. Obtaining a personal Spanish tax code (NIF) for the non-resident Spanish director;
4. Registering your company’s business activity with the Spanish Tax Office (Form 036).

Timescale

On receipt of the above documentation from you, we will normally obtain your Spanish tax number within approximately two weeks..

When we receive your go-ahead, we will invoice you for a payment on account of 175 Euros to proceed.

Digital Certificates

Once your company is registered for VAT in Spain, you might consider also obtaining a Spanish Digital Certificate. It is a actually compulsary but is widely ignored because up to recently, it has been been extremely difficult to obtain unless the company director can physically travel to Spain.

Having a Digital Certificate has certain advantages such as:

1. Being able to receive notificacions from the Spanish Tax Office. All Tax Office correspondence is sent electronically directly to the foreign company and not to us, their registered representatives. So without a Digital Certificate, important communications will be missed.
2. The possibility of applying for further registrations such as VIES, EORI and Social Security (to hire Spain-based employees).

We now have a licence to issue Spanish Digital Certificates directly, using videoconferencing to verify the company director’s identity, so no travel to Spain is required.

Our current charge to obtain and issue your company’s Digital Certificate varies between approximately 100 Euros for a 2 year certificate and 150 Euros for a 5 year certificate.

One Stop shop

If you would like to consolidate your VAT on sales in other EU countries into your Spanish VAT declaration, know as One Stop Stop, then this is possible. We can register your company for One Stop Shop in Spain and our current charge for this is 150 Euros, within approximately 10 days after your Spanish tax registration is complete.

Ongoing VAT compliance

If after registration you require our services to prepare and present your quarterly and annual Spanish VAT declarations, then we will also be happy to assist. Our current charge per quarter for VAT compliance is 179 Euros, on the assumption that you send us your VAT data quarterly in the attached spreadsheet format.

If you have any further questions, please do not hesitate to contact us on admin@europeaccountants.com or to visit our website www.spainaccountants.com .

Originally meant to be introduced in 1st January of this year, the implementation of these big changes in VAT in the European Union has been put back to 1st July due to COVID-19 and may be delayed even further because of concerns raised by influential countries such as Germany and the Netherlands on whether they can implement the changes on time.

The new law is very complex and you can find full links to the EU legislation on the EU website .

However here is a brief summary of the changes:

For goods imported from outside the EU or sold by non-EU traders, E-Commerce internet marketplaces will be, in certain cases, for VAT purposes deemed to be the supplier of goods to customers in the EU.

Let’s see how this work out in the case of an Amazon trader. So in these cases the Amazon trader will no longer need to collect the VAT on each sale and pay it over to the tax authorities where the customer is based ! Amazon will be required to do all of this on the trader’s behalf!

As a consequence, the trader will no longer be required to file VAT returns, or even maintain VAT registration, in the EU countries where there customers are based and they hold no stock. They will be required to keep their VAT registration in countries whey they are physically holding stock e.g. in the Amazon fulfilment warehouse, and to raise a VAT exempt invoice to Amazon for each sale that is made to customers. We assume that this will need to be reported quarterly to the Tax Authority for that country as a VAT exempt Intracommunity supply.

So in which cases is this big change going to apply ?

1. Goods imported and sold to EU customers by non-EU traders, to a maximum of 150 Euros.
2. Goods that are already in the EU (whether by origin or having been imported and cleared EU customs) that are sold by non-EU traders.

These changes are going to have a very big effect because much of what is being sold online in the EU is either imported or being sold by non-EU companies.

It is important to note that, for these rules to apply, the internet marketplace must be seen to be “facilitating the sale”, which means that it must control the terms and condition of the sale, payment between customer and supplier and arrange the delivery of the goods- which would be the case in the full package offered under Fulfilment by Amazon (FBA).

Extension of the EU VAT One Stop Shop to all traders and all services/goods

This change will make life a lot easier for many EU traders. They will now be able to declare and pay VAT on their sale to customers in other EU countries in one unified VAT return in their own country.

So if a Dutch Amazon trader has customers in Spain and France then they will be able to include these sales in their Dutch One Stop EU VAT return. VAT on the French sales will be at 20% and on the Spanish sales at 21% and the Dutch tax authorities will pay the amounts due to their Spanish counterparts. As you can see, these are massive changes to make to the tax declaration systems in EU countries, and it no surprise that some Member States are requesting a further delay to give them time for implementation.

One important note is that, under this scheme, traders will still be required to maintain VAT registration in the countries where they hold stock. So if the trader is using the Fulfilment by Amazon (FBA) program, it remains to be seen how this will work out in practice. I.e. if a Portuguese trader holds stock in an Amazon FBA centre in Spain, and makes sales to Portuguese customers (there is no Amazon distribution centre in Portugal), then will they still need to declare these sales in Spain or could they do it via the One Stop Shop of the Portuguese Tax Authorities ?

Amazon itself is being very quiet on this matter and we can find no reference on their websites to the upcoming changes in EU VAT law, which is unexpected because the changes are imminent !