C ompanies and entrepreneurs located in an EU member estate must have an intra community VAT number in place when trading with other EU located businesses
The intra community VAT number is a number identifying businesses when buying or selling products or services in EU estate members (B2B). By providing an intra community VAT number businesses do not charge VAT to their invoices in cross border transactions in the EU.
A Spanish company of musical instruments purchases gear to a provider located in Germany. Following the EU VAT regulations on cross border transactions within the EU, both the purchaser and the supplier must have an intra community VAT number in place and the invoice issued provider to the Spanish company will be ‘zero VAT’.
In the following table of contents you can find some more detailed information on the intra community VAT number:
Intra Community VAT in Spain
Who can obtain an intra community VAT number in Spain?
Any legal entity is suitable of obtaining an intra community VAT number in Spain; a private company, an entrepreneur, a branch of a foreign company, an association, an investor, etc. even an overseas company registered in Spain for VAT purposes can get an intra community VAT number, as long as they have a presence in Spain and obtaining the intra community VAT number is justified.
What is the form of an intra community VAT number in Spain?
There are two types of VAT numbers, one local used for the tax offices to identify the taxpayers and the second type of VAT number used to identify businesses in cross border transactions within the EU.
Local VAT number = Company NIF
Intra community VAT number = ES + company NIF
How can I verify if a client/provider is registered for intra community VAT number?
The European Commission has an intra community VAT number validation for every business in the EU which can be verified in the following link:
Are all Spanish companies registered for intra community VAT?
As opposed to other EU estate members, Spanish companies do not obtain an intra community VAT number right upon registration. They must run an application with the Spanish tax office to obtain one.
How is the application made?
Applications for an intra community VAT number are processed online through the Spanish tax office Agencia Tributaria website.
Following a recent ruling, companies and corporate bodies must interact with the Spanish tax office electronically, which means that, in order to run the application, the entity must have a digital citizen certificate in place.
See our FAQs page for further information on what a digital citizen certificate and how a company can obtain one.
Is the intra community VAT number application granted in all cases?
It is not. In order to obtain an intra community VAT number, the applicant must prove a minimum establishment in Spain by means of having a physical presence (an office) or a company representative who runs the onsite business for the company.
In the past decades, intra community VAT is been used for missing trader schemes aka carrousel fraud, for which the EU has put in place a set of measures to tackle VAT scams.
These measures include a monitor visit or inspection by the Spanish tax authorities upon application for an intra community VAT number. In this visit, the tax authorities will verify the effective establishment of the company and question whether the applicant needs the number.
Using a virtual office or an adviser’s address (lawyer, accountant) might most likely result in the application to be turned down.
Is the intra community VAT number perpetual once is granted?
It is not. The tax authorities are constantly monitoring the existence of intra community VAT numbers to verify that those are effectively used.
Misusing or not carrying out cross border transactions during an extended period of time should turn in the intra community VAT withdrawn.
At Legaliaspain we are VAT experts, do not hesitate to contact us and get in touch with one of our English speaking tax attorneys for further information on how to obtain a VAT number for any type of legal entity in Spain.