# Spanish VAT freelancer



## leehod (Jan 12, 2019)

Hi,

I'm originally from the UK where sole-traders and small businesses are exempt from VAT upto around 80,000gbp I believe. I've never had to pay it before as a freelancer in the UK, earning around £33,000 pa.

I realise that there is no such exemption in Spain and I'm liable for 21% IVA. 

However what I don't understand is if my clients are outside of Spain, do I still have to charge IVA?
Most of my clients are in the US or the UK. (Perhaps it's just the clients outside of the EU for which I don't have to charge?)


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## Bevdeforges (Nov 16, 2007)

On services, VAT is charged based on where the services were performed. So, if you do your work for your clients in Spain, then Spanish VAT is chargeable on all invoices.

For merchandise, the VAT is charged based on the customer location, however there is usually a certain amount of "export paperwork" that needs to be filled out and filed to "prove" that the goods were shipped directly out of the country.


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## Nononymous (Jul 12, 2011)

I'd dig into that a little bit and confirm. For what it's worth - possibly not much - a I'm only required to charge GST (the Canadian VAT) for Canadian clients, not US, for consulting services performed while resident in Canada.


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## Bevdeforges (Nov 16, 2007)

Nononymous said:


> I'd dig into that a little bit and confirm. For what it's worth - possibly not much - a I'm only required to charge GST (the Canadian VAT) for Canadian clients, not US, for consulting services performed while resident in Canada.


There are some EU wide rules that apply to VAT that may not apply to something like GST elsewhere. This may help with some of that: https://europa.eu/european-union/business/vat-customs_en


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## leehod (Jan 12, 2019)

Hmm thanks for replies. I had been under the impression that whilst living in Spain then for my US clients I wouldn't have to charge VAT, and possibly even for my UK clients. I thought it was going to be only any Spanish clients I might have?

It would be nice if I could find out 100% one way or the other, as VAT would mean I lose approx 500EUR pm, which I simply cannot afford realistically. 

I had a brief conversation with a gestoria a few weeks back, who had suggested the thing about for US clients I wouldn't have to charge it, but now I'm totally unsure


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## leehod (Jan 12, 2019)

For example from expatica:

_You may be exempt for paying VAT on goods and services if you are dealing with business customers (ie. VAT registered) outside of Spain but within the EU, as they pay the VAT at their country’s rate at their end. If you intend on doing this, you need to register this with the Agencia Tributaria to receive a special tax number, and will need to make quarterly declarations about your ‘intra-community’ business. As of January 2018, if you are selling digital services to consumers within the EU, you now have to charge VAT at the rate of your customer’s country._

So this suggested to me that at least for my US clients I'd be exempt from VAT. 

As UK VAT doesn't demand VAT for upto £80,000 (which I'm below), I thought I might even be exempt from charging these clients too.

Obviously these articles aren't necessarily accurate, but ...


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## Bevdeforges (Nov 16, 2007)

> You may be exempt for paying VAT on goods and services if you are dealing with *business customers (ie. VAT registered)* outside of Spain *but within the EU,* as they pay the VAT at their country’s rate at their end.


The US doesn't have a VAT and thus your US customers aren't "VAT registered." Also note the stipulation that your business customers must be "within the EU."

Do take a look at the europa.eu page I referenced earlier - or this page: https://europa.eu/youreurope/business/taxation/vat/cross-border-vat/index_en.htm

It's not always a simple yes/no situation. But the europa.eu website is fairly authoritative (it's basically the EU) and can direct you to the definitive resources in the country where you're working. (Though the Spanish resources are likely to be available mostly in Spanish.)


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## leehod (Jan 12, 2019)

Oh yes, I was misreading it.

But given what you said about the US not having VAT I should be good on that front then? (No need to bill my US clients for VAT even if I'm a Spanish resident?..Just double checking).

I will check out that webpage in regard to UK clients, thanks.


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## Bevdeforges (Nov 16, 2007)

leehod said:


> Oh yes, I was misreading it.
> 
> But given what you said about the US not having VAT I should be good on that front then? (No need to bill my US clients for VAT even if I'm a Spanish resident?..Just double checking).
> 
> I will check out that webpage in regard to UK clients, thanks.


It depends on what you're billing them for. If it's merchandise, there is a protocol for officially billing without VAT based on proof that the product has left the EU. For services, if the service has been performed in Spain, I wouldn't be so sure. The website for the Spanish VAT authority should have information on this.


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## leehod (Jan 12, 2019)

It is digital services (programming, IT consulting etc). Hmm


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