As an international company with employees in Spain, it is crucial to understand the process of obtaining a VAT refund in Spain. VAT refund differs based on the location of the taxpayer’s establishment.
In this article, we will explain the process for obtaining a VAT refund in Spain for domestic businesses, EU entrepreneurs, and non-EU taxpayers.
Domestic businesses in Spain can obtain VAT refunds according to the standard regime. They can carry forward VAT receivables until the final VAT return, which corresponds to Q4 or December, depending on their reporting obligations (quarterly or monthly).
Alternatively, they can choose the monthly refund scheme, allowing them to request a refund each month. However, smaller businesses may find it cumbersome to upload their invoices to the Tax Office website within four days.
As a result, it is important to understand the VAT refund process in Spain and choose the most appropriate method.
Foreign businesses selling goods or services in Spain to end consumers (B2C) must charge VAT and submit VAT returns to the Tax Office following the same rules as domestic businesses.
Companies based in other EU countries are always eligible to apply for a VAT refund in Spain. Although the process differs, they are subject to the same basic requirements as Spanish businesses.
Foreign businesses may have paid VAT to their Spanish suppliers and are not submitting VAT returns to the Spanish Tax Office. The VAT refund process is currently conducted online through the local Tax Authority of the taxpayer’s home country.
Non-EU companies are required to appoint a fiscal representative in Spain who must be a resident.
The fiscal representative may be held personally liable if the VAT refund turns out to be improper or unjust.
When the client is not based in another EU country, the refund of VAT paid in Spain depends on the existence of reciprocity for the benefit of Spanish businesses in the entrepreneur’s home country.
The Spanish Tax Office has issued several rulings confirming the countries that comply with this reciprocity rule. Companies based in the United States are not eligible for a VAT refund.
At Employing In Spain, we understand the importance of the minimum wage for workers and companies in Spain.
Our team of professionals is available to help you meet your employment goals and objectives. If you need advice on labor and employment matters, do not hesitate to contact us and schedule your appointment today.
We are at your disposal to provide you with the best assistance for your company’s operations in Spain.
In summary, understanding the VAT refund process in Spain is crucial for international companies with employees in Spain. As explained above, the process differs based on the location of the taxpayer’s establishment.
At Employing In Spain, we can provide you with comprehensive advice on VAT refund and employment matters in Spain.
Contact us today to schedule your appointment and get the best assistance for your company’s operations in Spain.