IVA in Spain for non-Spanish clients
Thread poster: Alexandra Beisl

Alexandra Beisl  Identity Verified
Germany
Local time: 08:55
English to German
+ ...
Feb 3, 2008

Hi there

I know this topic has been discussed in various shapes or forms in the past, but never specific enough to help me.

I have just registered with the Hacienda as "autonomo" here in Spain according to modelo 036. When I told them that I would not have to charge my clients IVA (the Spanish equivalent of VAT) as all of my clients are outside of Spain this was met with incredulence. However, I have read and heard the following repeatedly on this forum with regards to registering as a translator in Spain, namely that as an autonomo

A) If you invoice a Spanish client you have to add VAT; at the same time IRPF gets deducted by your Spanish client (almost like an "at source payment") to pay this directly to the Hacienda

B) If you invoice a foreign client you are yourself responsible for IRPF payments which are declared and made every three months by the autonomo himself as part of a quarterly tax declaration. However you do NOT charge foreign clients VAT.

Here are my questions:

1. Is it true that B) only applies if you register under "translation services" rather than "translator". If so, what is the exact Spanish wording they are looking for and what is the relevant "epigrafe". I get the feeling, unless I hit everything right on the spot on these forms, Spanish officials are very unhelpful and unforthcoming.

2. Is it true that B) only applies to EU Clients, i.e. clients outside Spain but within the EU? What about my clients in the US and Switzerland. Do I have to charge them IVA?

3. Somebody else has told me that I can only do B) (not charge foreign clients IVA) if I also have Spanish clients on my books so that the Hacienda get some IVA out of me. That seems very strange to me, as I cannot see that I can be discriminated against simply becaus I do not have a Spanish client base.

Thanks for your help! By the way, I have also consulted an asesor on this who was recommended to me and he seemed as incredulous as the Hacienda when I confronted him with my questions. Maybe this is do to with the fact that I live in a very small town here in Granada.


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Parrot  Identity Verified
Spain
Local time: 08:55
Member (2002)
Spanish to English
+ ...
Hi! Feb 4, 2008

alexbeisl wrote:

Hi there

I know this topic has been discussed in various shapes or forms in the past, but never specific enough to help me.

I have just registered with the Hacienda as "autonomo" here in Spain according to modelo 036. When I told them that I would not have to charge my clients IVA (the Spanish equivalent of VAT) as all of my clients are outside of Spain this was met with incredulence. However, I have read and heard the following repeatedly on this forum with regards to registering as a translator in Spain, namely that as an autonomo

A) If you invoice a Spanish client you have to add VAT; at the same time IRPF gets deducted by your Spanish client (almost like an "at source payment") to pay this directly to the Hacienda

B) If you invoice a foreign client you are yourself responsible for IRPF payments which are declared and made every three months by the autonomo himself as part of a quarterly tax declaration. However you do NOT charge foreign clients VAT.

Here are my questions:

1. Is it true that B) only applies if you register under "translation services" rather than "translator". If so, what is the exact Spanish wording they are looking for and what is the relevant "epigrafe". I get the feeling, unless I hit everything right on the spot on these forms, Spanish officials are very unhelpful and unforthcoming.


As an "autonomo", you register under national economic activity classification 774, "traductores e intérpretes" (translators and interpreters). And the forms are not helpful at all, but the personal assistance (Ventanilla Unica) service is. You may also have some problems with the 901 telephone assistance, as that's partly automated. If your question doesn't fall under any option they offer to solve, for instance... best to insist on speaking to an operator.

B) only applies to those deriving income from abroad in a proportion higher than 30% of the total. This 30% is based on income of the previous year. In this case, the worker fills out form 130 for 20% of the tax base and submits it on a quarterly basis. (Any refunds will come in after the yearly declaration).

2. Is it true that B) only applies to EU Clients, i.e. clients outside Spain but within the EU? What about my clients in the US and Switzerland. Do I have to charge them IVA?


No VAT for foreign clients, AFAIK. And no VAT (0%) for VIES-registered EU clients, who pay this to their home tax authorities (at the rate of the purchasing country). This puts physical persons not registered in VIES under the yes-VAT category.

3. Somebody else has told me that I can only do B) (not charge foreign clients IVA) if I also have Spanish clients on my books so that the Hacienda get some IVA out of me. That seems very strange to me, as I cannot see that I can be discriminated against simply becaus I do not have a Spanish client base.


Your question on B) applies to declaring IRPF, as I take it, not charging IVA. People and companies not based in Spain have no contact with the Spanish tax authorities and cannot pay in any amounts whatsoever, whether IVA or IRPF. Regarding VAT, my responses apply to companies. I can't answer about physical persons living outside the EU, as I have no clients with that profile.

Hope it helps


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Alexandra Beisl  Identity Verified
Germany
Local time: 08:55
English to German
+ ...
TOPIC STARTER
IVA in Spain for non-Spanish clients Feb 4, 2008

Thanks for your reply. It basically confirmed what I already thought. The only problem is that I cannot convince the Hacienda of this. They categorically say I have to charge VAT (IVA) to all clients, regardless as to whether they are in Spain or not. One even said that foreign clients would also have to deduct my IRPF at source. When I pointed out that this would hardly be possible, as they would not have any contact with the Hacienda as a tax authority they were not amused. Do you know of any law or regulation or directive that I could slam on their desk? I get the feeling they are not very well informed at my local office and therefore are rather obstinate. And unfortunately, my Spanish is not always good enough to explain things via a helpline in person, so it would be good to be able to back this up with some sort of officialdom.

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Alexandra Beisl  Identity Verified
Germany
Local time: 08:55
English to German
+ ...
TOPIC STARTER
IVA in Spain for non-Spanish clients - link Feb 4, 2008

I just wanted to add the following which I found on the web just now. Again, rather confusing and I am not sure if this only applies to companies:

"Do I always need to include VAT tax when billing my clients?
You must always charge VAT tax to clients within Spain and to clients outside the EU. You must also charge VAT tax to EU clients, unless:

the transaction forms a valid intra-communitary supply between two censo VIES VAT registered entities in separate EU member states, or
if a service is delivered to another member state that qualifies under the Reverse Charge rule, in which case the VAT registered recipient would have to self account for VAT tax.
It is the nature of the transaction that dictates whether or not VAT should be charged. In the above exceptions, certain administrative details need to be complied with in order to qualify for the VAT exemption. When in doubt, charge VAT.

If you have a client located in another EU country, in some cases you may have to register in that country then charge VAT from that local entity. "

http://www.strongabogados.com/accounting.php


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Alexandra Beisl  Identity Verified
Germany
Local time: 08:55
English to German
+ ...
TOPIC STARTER
IVA in Spain for non-Spanish clients Feb 4, 2008

Can I just ask you for clarification on the following with regards to IVA:

"No VAT for foreign clients, AFAIK. And no VAT (0%) for VIES-registered EU clients, who pay this to their home tax authorities (at the rate of the purchasing country). This puts physical persons not registered in VIES under the yes-VAT category."

If a client is not VIES-registered, i.e. from the USA, does this mean I have to charge IVA, or did I misunderstand?

Also, the local Hacienda has said if the VIES/regitsered EU clients/purchasers of my services pay to their home tax authorities (at the rate of the purchasing country) I would need a corresponding declatarion/certificate from this client. Do you have such a thing from your clients?


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Parrot  Identity Verified
Spain
Local time: 08:55
Member (2002)
Spanish to English
+ ...
Complicated questions Feb 4, 2008

I've mailed you a private response, as I can only tell you what I was told orally in the public treasury central office. I suggest you go down to Granada (the city) and enquire.

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Inmaculada Vicente López
Spain
Local time: 08:55
English to Spanish
+ ...
No VAT for EU or foreign companies Feb 4, 2008

Hi!
I also live in Granada and I know what you are facing. I suggest that you visit the central Hacienda office in Granada city, as they are very helpful at the information desk. You just sit down with an official and they explain anything that you may ask.

I did myself last month of July and they confirmed that I have to include VAT in my invoices ONLY to companies established in Spain.
No need for EU companies, as they are responsible for paying VAT in their respective companies, and no need for companies outside the EU, as VAT is an exclusive european tax.

You will find here the Spanish VAT legistation:

http://www.boe.es/g/es/bases_datos/doc.php?coleccion=iberlex&id=1992/28740

Read carefully Article 70:

Artículo 70. Lugar de realización de las prestaciones de servicios. Reglas especiales.

Uno.-Se entenderán prestados en el territorio de aplicación del impuesto los siguientes servicios: [...]

5. Los servicios que se indican a continuación cuando el destinatario sea un empresario o profesional y radique en el citado territorio la sede de su actividad ecónomica o tenga en el mismo un establecimiento permanente o, en su defecto, el lugar de su domicilio: [...]

g) Los servicios de traducción, corrección o composición de textos, así como los prestados por intérpretes. [...]

Dos.-No se considerarán realizados en el territorio de aplicación del Impuesto los servicios a que se refiere el número 5. del apartado anterior cuando se presten por un empresario o profesional establecido en dicho territorio y el destinatario de los mismos esté establecido o domiciliado fuera de la Comunidad o sea un empresario o profesional establecido en la Comunidad.

Tip: Don't trust "asesores", they are not familiar with translation services and always confuse our job and don't remember that we sell services, but not goods (which are subject to VAT).
Another tip: you will need to register at VIES as an intracommunity operator to get your own VAT number.
Hope it helps,

Inma


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Alexandra Beisl  Identity Verified
Germany
Local time: 08:55
English to German
+ ...
TOPIC STARTER
Thanks for all your suggestions on IVA in Spain Feb 5, 2008

Thank you so much for all your suggestions and your advice. A Spanish lawyer has now also confirmed what I thought all along and what you have said. If the local Hacienda are still obstinate, I will tell him to deal with them. I don't get the impression they are actually listening to me right now.

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