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VAT - Can't issue an invoice in Spain without VAT registration?
Thread poster: Gillian Searl

Gillian Searl  Identity Verified
United Kingdom
Local time: 19:56
Member (2004)
German to English
Jun 14, 2010

I don't need to register in the UK for VAT because my turnover is under the limit (GBP 70,000) but today I get this email from a Spanish customer:
"I need to come back on the topic of the VAT ID: Even if you don´t have to register according to British law, you have to do it as a provider or customer of any firm in another EU member state. We have to include all these operations in a recapitulative statement with your tax ID, so I kindly ask you to register and send me your Tax ID. Please take note that we can´t give you any more job without this number. "

So I checked with some Spanish lawyers who I found on the web and they say (in poor English):
"Thank you, I agree you should register for VAT. ... the regulation is the same in the UK than in Spain, a registered tax ID (VAT number) and a tax registration is mandatory to issue invoices (even if your turnover is small)"

But the point is the regulations appear to be different. Questions to my Spanish colleagues:
Do you absolutely have to have both (income) tax and VAT registration before you can issue an invoice in Spain? Does Spain have the same/similar "small business exemption" as the UK, Germany and other countries too?

It seems like voluntary registration is the way to go but I could do without the bureaucracy...

Thanks
Gillian


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Tom in London
United Kingdom
Local time: 19:56
Member (2008)
Italian to English
Read this Jun 14, 2010

Gillian - You may find this recent thread relevant:

http://www.proz.com/forum/money_matters/172829-partita_iva_italiana_for_uk_based_translator.html



[Edited at 2010-06-14 17:20 GMT]


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Maria Lila  Identity Verified
Germany
Local time: 20:56
French to Spanish
+ ...
Yes Jun 14, 2010

Hello Gillian,

In Spain, in order to issue invoices for another EU-member you need to be registered for a VAT number. Since Jan, 1st, 2010 your clients in Spain need you to be registered, otherwise they cannot include you in their recapitulative statement. Before, it was not compulsory, but now, it is. There are no similar exemptions as the one you mention in the UK or Germany.

Don't make talk about Bureaucracy...

Good luck!

[Edited at 2010-06-14 16:54 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 19:56
Member (2007)
English
+ ...
Have you read all the posts on this? Jun 14, 2010

http://www.proz.com/forum/money_matters/153466-eu_vat_changes_as_of_1_jan_2010.html

Here in France we actually have a simplified situation (not common, I know!) - we can have a VAT No to put on our invoices, even though we are not registered for VAT and don't add it to our bills.

[Edited at 2010-06-14 17:26 GMT]


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Tom in London
United Kingdom
Local time: 19:56
Member (2008)
Italian to English
Yes Jun 14, 2010



Yes - that's an excellent thread


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Gillian Searl  Identity Verified
United Kingdom
Local time: 19:56
Member (2004)
German to English
TOPIC STARTER
I read the long thread - and the short Italian one Jun 14, 2010

So this Spanish company wants me to comply with Spanish VAT law - I can't do that because I have to comply with English VAT law. I could register voluntarily but I am not sure there are any benefits. Does anyone know any benefits? Otherwise I'll say goodbye to this client - they don't send me much work anyway.

I do have one large Spanish client - if they were to insist on this I would have to do the voluntary registration.

Gillian


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Tom in London
United Kingdom
Local time: 19:56
Member (2008)
Italian to English
Benefits Jun 14, 2010

Gillian Searl wrote:

So this Spanish company wants me to comply with Spanish VAT law - I can't do that because I have to comply with English VAT law. I could register voluntarily but I am not sure there are any benefits. Does anyone know any benefits? Otherwise I'll say goodbye to this client - they don't send me much work anyway.

I do have one large Spanish client - if they were to insist on this I would have to do the voluntary registration.

Gillian


The only benefits of being VAT-registered for a translator is that you can claim back the VAT on things you buy. But translators don't buy very many business-related items. What can I say: Printer ink, paper, a computer (every few years), broadband, phone line, electricity, maybe a new chair once in a while and, er, that's about it.

Even if (as seems increasingly likely) the UK government puts up VAT to 20% (or more) in next week's budget I still can't see much benefit in being VAT-registered. The relatively small amounts you'd save would be offset by the crippling additional administration costs of doing your VAT returns, making the payments, etc, etc.

[Edited at 2010-06-14 18:02 GMT]


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Tom in London
United Kingdom
Local time: 19:56
Member (2008)
Italian to English
My accountant says Jun 14, 2010

I've just asked my London accountant and here's what he says (in writing):

"The need to be VAT registered is normally a turnover based question. Therefore, any individual with self-employed income below the current threshold of £70,000 need not register, regardless of the nature of his activities. The fact that you have clients in other EU member states is not relevant in these circumstances."

No charge for that bit of free accountant's advice.



If anyone wants a really nice accountant in London, email me !

[Edited at 2010-06-14 18:12 GMT]


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escapeman
Local time: 19:56
Intracommunity VAT number Jun 14, 2010

In all the posts on the various forums with regard to this problem there seems to be no definitive solution.

What I have gleaned so far is -

If you are a non VAT registered sole trader in France, for example, you can be provided with a VAT number for use when invoicing other EU member states, without having to actually register for VAT

This doesn't appear to be the case in the UK but I haven't been able to find anyone at the tax office who knows anything about it. I am trying to invoice a Spanish company but they will only accept an invoice with an intracommunity VAT number that they can check on VIES. Nothing else will do for them.

Does anyone have any information in Spanish that I can send them that could convince them otherwise? or is the only solution to become VAT registered in the UK, as has been suggested by some posters?

Thanks!


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Tom in London
United Kingdom
Local time: 19:56
Member (2008)
Italian to English
The solution Jun 14, 2010

escapeman wrote:

there seems to be no definitive solution


I'm taking my accountant's advice as the definitive solution (see above).


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escapeman
Local time: 19:56
Thanks Tom Jun 14, 2010

Unfortunately that doesn't help me or hundreds of people in my situation.
Great financial advice but it won't convince the Spanish firm to pay my invoices!
No VAT number that can be checked on VIES no invoice getting paid:-(


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Charlie Bavington  Identity Verified
Local time: 19:56
French to English
Pragmatic Jun 14, 2010

Gillian Searl wrote:

So I checked with some Spanish lawyers who I found on the web and they say (in poor English):
"Thank you, I agree you should register for VAT. ... the regulation is the same in the UK than in Spain, a registered tax ID (VAT number) and a tax registration is mandatory to issue invoices (even if your turnover is small)"

That's not even true though, is it - we are prefectly entitled to issue invoices without a VAT number. I did it for years; I daresay you still do. Pretty much what Tom's accountant said.

What you need to establish, I think, is what regulations apply in Spain to the payment of invoices, not the issuing. What to they do when they pay invoices from the US, or Malawi or Nepal? Of course, the situation is complicated by the fact we are in the EU, but if you are outside the VAT system and not charging VAT.... and of course you wouldn't charge them VAT anyway, so it really is only a number. Frustrating.

It seems like voluntary registration is the way to go but I could do without the bureaucracy...

Pending our adoption of a French work-round (as Sheila described), you are probably right. By the time you've posted, read other threads, sought advice, tried to convince the customer you know what you're talking about.... you could have filed a year's worth of VAT returns and still had time for a cuppa. Plus you really do need one now if you ever do outsource to Europe, because your suppliers are going to struggle without your VAT number for their ESLs. (List of customers - needs VAT number; in my opinion, also the reason that suppliers are now being asked for VAT numbers by those not fully au fait). It is the approach I have adopted.


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Neil Coffey  Identity Verified
United Kingdom
Local time: 19:56
French to English
+ ...
What do official Spanish sites say... Jun 14, 2010

Gillian Searl wrote:
"Thank you, I agree you should register for VAT. ... the regulation is the same in the UK than in Spain, a registered tax ID (VAT number) and a tax registration is mandatory to issue invoices (even if your turnover is small)"


Gillian, I think it might be worth trying to track down (or ask your client to present you with) the actual official Spanish site where it's saying this is a requirement.

The problem with what the lawyer quoted to you is that the situation they paint about the UK is squarely not true, at least as far as available information currently stands-- if you trawl through the gumf on the HMRC web site, it basically concurs with what Tom's accountant has informed him.

I think it's also fair to say that in both the UK and France (the other country where I've looked), the "official" information given is far from clear and concise. So in practice, everybody both sides of the channel is struggling to understand what the actual rules are. It's quite possible that your Spanish agency is just interpreting things the way they want to (it's probably true that it's easier for them administratively if you just have a VAT number, but that doesn't necessarily mean you have to).

Another situation I've encountered (but not in Spain) is that a client is saying they need EITHER a VAT number OR a tax residency certificate. I don't know if that might be an option for your Spanish client.


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John Rawlins  Identity Verified
Spain
Local time: 20:56
Spanish to English
+ ...
Come on Brussels! Jun 14, 2010

It seems unfair that we in Spain have to charge and declare VAT from the first céntimo while our British based colleagues get away scot-free until 68,000 pounds. That represents an unfair trading advantage (less tax and less paperwork for the UK).

Surely, some good old fashioned harmonisation is called for here. Come on Brussels - get those pesky Brits back into line!




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RobinB  Identity Verified
Germany
Local time: 20:56
German to English
Contact HMRC directly Jun 14, 2010

Gillian,

I really do suggest you contact HMRC directly (either the central helpline or your local office) so they can explain how you can obtain a VAT ID without actually being VAT-registered.

Robin


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