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VAT Number in Spain

VAT Number in Spain

Understanding the need to obtain a Spanish VAT number is important for all business owners. A distinction is made between goods and services that are subject to this indirect tax and those that are not. Therefore, it is useful to understand when this number becomes mandatory, according to business activities.

Our team of agents who specialize in VAT registration in Spain can help you with detailed information on the need to obtain this number and how it will be used and mentioned on the invoices. Moreover, we can help non-resident companies that do not have a permanent establishment in the country but are required nonetheless to obtain a VAT number in Spain in order to import goods or engage in other types of services. 

Is the CIF number the same as the VAT number in Spain?

When doing business in Spain, companies, as well as sole traders, are attributed a fiscal identification number (Certificado de Identificación Fiscal or CIF) that is used as the basic manner of identification for that economic operator.

It is not uncommon to confuse the CIF and the VAT number in Spain, this is why we recommend that business owners get in touch with one of our agents specialized in VAT registration in Spain in order to determine the necessity of the VAT according to the types of business activities in which the business will engage. 

The CIF and the VAT are not the same, however, they are both based on the attributed CIF or tax ID number for the business. Having a CIF is mandatory for any tax transaction of significance in the country; in other words, companies are obliged to have a CIF number and in fact, this is obtained upon the company’s registration with the Central Register

The company’s tax ID number consists of eight digits and the main difference is that the VAT number is Spain will also contain the country code, ES. In practice, the Spanish VAT number can be described in the following manner: VAT CIF = ES + CIF. 

Who needs a VAT number in Spain?

While Spanish companies that engage in any sort of business activity that has tax significance use the CIF, the VAT number in Spain is used for intra-community operations or to import goods into Spain.

An important issue to take into consideration is the requirement to obtain a Spanish VAT number for companies that are not based in Spain and nonetheless engage in intra-community transfers or import goods into the country (as well as for those businesses that hold imported goods on Spanish territory before they move forward). Companies that are engaged in these activities will need to apply for a VAT number with the authorities and this is also done for recovering the VAT they have paid on Spanish territory as well as when they apply for reverse charge VAT. The same applies when foreign companies hold for-profit events in Spain although they are not regularly based in the country. 

Non-resident companies that do not have a CIF can request their number using a special form and by following the rules provided by the Tax Agency (Agencia Tributaria).

Our team of agents who specialize in VAT registration in Spain can assist foreign companies interested in obtaining this number.

What are the VAT rates in Spain?

When discussing the value-added tax in Spain, it is important to understand the different rates that apply according to the type of delivered services or goods. In Spain, there are three distinct rates:

  • the standard rate of 21%: applicable to cable and TV licenses, cleaning services in private households, medical and dental care (with some exemptions), domestic care services, hairdressing services, and others.
  • the first reduced rate of 10% in case of: water supplies, some types of food, the transport of passengers, private home renovations, agricultural inputs, hotel accommodation, etc.;
  • the 4% reduced rate for: certain foodstuffs, social housing, newspapers, and books, certain types of medical equipment, certain pharmaceutical products, and others.
  • certain exempt services: admission to cultural events as well as the use of sporting facilities (in some cases).

As far as VAT filing and payment are concerned, these are due on a monthly basis when the turnover for the previous taxation period exceeds a certain amount. When this is not the vase, quarterly filings are due. The electronic VAT reporting system simplifies the procedure and the information is submitted online, within a few days of issuance (for the VAT accounting documents).

Our team specialized in VAT registration in Spain can provide you with more details on the VAT-exempt services as well as a complete list of categories that are subject to this tax. Contact us for more information.