Accounting in Spain

Articles:
Case study in EU sales via Amazon

FAQs:
What are the rules about how an invoice needs to look?
What is the VAT tax rate in Spain?
Does my Spanish company always need to include VAT tax when billing our clients?
What tax forms need to be filed for a Spanish company?
With an SL, when do I get a refund of the VAT tax I've paid?
Receipts vs. invoices: what is the difference in Spain?
Can I deduct travel expenses in Spain?
Can I deduct expenses related to the sales department of my company (gastos de representación)?
Does my company need to report our invoices electronically to the tax office?
If I use Xero or Quickbooks for my accounting, can you file the tax forms?
Can you do the accounting according to UK GAAP?
What does your service include?
Why choose Strong Abogados to do my accounting in Spain?

 

 

What are the rules about how an invoice needs to look?

An invoice (factura) in Spain must contain the following:

• Your company name, CIF, and address.
• The customer's full name, CIF (or NIF or NIE), and address.
• An invoice date and an invoice number.
• The invoice must have a line for the amount before IVA is added("base imponible"), as well as a line for the IVA itself.

In Spain, payments are typically made via bank transfer. In this case, since the client will pay some time after receiving the invoice, it's a good idea to include the following disclaimer: "El pago de esta factura se acredita por su abono bancario" ("Your bank receipt is your proof of payment of this amount").

Legally, the invoice needs to be given or mailed to the customer, rather than sent as an email attachment.

If the invoice does not include IVA (see the next question), then the invoice needs to list the reference to the legal code under which this exemption applies.

When creating invoice numbers, there may not be gaps in the numbers. You also cannot have a later invoice number with an earlier invoice date.

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Does my Spanish company always need to include VAT tax when billing our 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 is between two 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.

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Receipts vs. invoices: what is the difference in Spain?

A receipt is called a ticket in Spanish. A proper receipt is called a factura simplificada (simplified invoice). To be a factura simplificada, the receipt must contain:

• The invoice date and invoice number
• The vendor company's NIF
• A description of the goods or service
• The VAT tax applied

In other words, the only difference between a factura simplificada and a full invoice is that the person or company paying the invoice is not listed (name, tax ID, and address).

The receipt is deductible as an expense (if you can justify that the cost is related to the business), but the VAT is NOT deductible. Therefore, when you buy something in a store, you should always ask for an invoice. To avoid problems, we recommend that you don't include receipts higher than 50€ in your accounting.

When there is an audit, the Spanish tax office pays special attention to these expenses:

• Restaurant expenses where the company has offices
• Bars, restaurants, and hotels (especially when the date is a weekend)
• Food
• Cell phones
• Clothes

In these cases, you must prove without any doubts that these expenses were necessary and related to the business.

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Can I deduct travel expenses in Spain?

In order to deduct travel expenses -- transportation, food, and lodging -- you must be able to show that these expenses are necessary to obtain earnings, clearly linked to the economic activity of the company, as opposed to personal expenses. You should retain emails exchanged with the client to reflect the meeting or work meal. You must show a full invoice, not just a train ticket, and the transportation ticket should never be paid in cash. In the case of food, it should be a restaurant, not a food stand.

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Can I deduct expenses related to the sales department of my company (gastos de representación)?

Yes, in Spain you can deduct these expenses, but only up to 1% of your company turnover. Anything over 1% is not deductible. These expenses may include:

• Hotel stays.
• A free meal at a restaurants, or tickets to a sporting or leisure events.
• A workshop or conference.

These expenses must be justified by a full invoice and electronic payment. The cost must be market price.

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Does my company need to report our invoices electronically to the tax office?

Countries have been implementing the EU directive to electronically report VAT on all invoices created. Spain and other countries have been granted extensions in implementing this directive. Spain finally passed the regulation called SII (Sistema Inmediato de Información) which declares that starting July 1, 2017, any company that has over 6MM€ in annual invoicing must send their invoices to the Spanish tax office within 4 days of the creation of the invoices.

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