Fiscal Representative in Spain: What is It and How to Get One
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Fiscal Representative in Spain: What is It and How to Get One

Understanding fiscal and tax representation in Spain

Navigating the Spanish tax system can be a complex endeavor for foreign businesses looking to establish a commercial presence in Spain. Particularly, those not established within the European Union must grapple with the mandatory appointment of a fiscal representative when registering for Value Added Tax (VAT) as a non-resident. This guide delves into the pivotal role of a fiscal representative in Spain, outlining their responsibilities, which include being jointly and severally liable for the taxpayer’s VAT liabilities. Whether you’re seeking to initiate operations in Spain or aiming to reclaim VAT under the 13th VAT Directive, understanding the importance of fiscal representation is essential. Here, we provide an essential overview for companies on the brink of stepping into the Spanish market, ensuring compliance and financial savvy.

fiscal representatives in spain

What is a fiscal representative in Spain?

A fiscal representative in Spain serves as a crucial intermediary for non-EU businesses and property owners navigating the Spanish tax system. This local VAT agent assumes the responsibility for accurate and timely tax reporting and payments on behalf of their clients. Required by law, a fiscal representative must be appointed by all non-EU entities that need to register for an EU VAT number, ensuring they comply with Spanish tax obligations.

The responsibilities of a fiscal representative extend beyond mere administration; they are held jointly and severally liable for their client’s VAT. In instances of negligent oversight or deliberate misreporting of VAT, the representative faces liability for any unpaid taxes. Consequently, fiscal representatives often require a cash deposit or bank guarantee to mitigate potential risks.

For companies not established in Spain but wishing to engage in taxable trade within its borders, appointing a tax representative is essential. This representative, who can be any natural or legal person residing in Spain, becomes the primary point of contact with Spanish authorities. It is imperative to have this representation in place before commencing any taxable trading operations.

Non-resident property owners in Spain also face the legal mandate to appoint a Fiscal Representative. With taxes being imposed at national, regional, and local levels, understanding and fulfilling tax obligations can be daunting for foreigners. Professional legal assistance becomes indispensable to ensure timely payment and comprehension of tax liabilities.

The legislation governing VAT fiscal representation is explicit: it is obligatory for non-EU companies as per Article 164.1.b of the VAT Law, which outlines taxpayer obligations. While EU companies may choose whether or not to appoint a fiscal representative, non-EU companies must do so unless their activities are confined to customs or free zones, or there exists a mutual assistance agreement between countries that negates this requirement. Thus, trading in Spain under the same conditions as domestic companies necessitates the appointment of a tax representative—a pivotal step for international businesses aiming to thrive in the Spanish market.

Read also: What is VIES (VAT Information Exchange System)?

Understanding and complying with Spain’s tax requirements can be complex, especially for non-residents or international businesses. Lawants provides comprehensive tax consultancy and fiscal representation services, ensuring your obligations in Spain are met with precision and efficiency. Our experts are here to guide you through the intricacies of Spanish tax law, offering peace of mind and strategic advice tailored to your unique situation.

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When do you need a fiscal representative in Spain?

Identifying when to appoint a fiscal representative in Spain is crucial for non-EU businesses engaging in taxable transactions within the country. This legal obligation arises for companies that are VAT registered as non-residents, and it extends to various business activities including importing goods to Spain, exporting from Spain to both EU and non-EU countries, and conducting B2B or B2C supplies within Spanish territory.

Specifically, non-EU businesses must appoint a fiscal representative if they are participating in special VAT schemes such as the Mini One Stop Shop (MOSS) or One Stop Shop (OSS) and choose Spain as their competent authority. Additionally, if a company wishes to claim a VAT refund or is involved in regular import and export of goods with countries outside the EU, a tax representative becomes mandatory.

For EU-based companies, while the appointment of a fiscal representative is not obligatory since 2004, it can be highly beneficial. Situations warranting voluntary appointment include distance selling that exceeds EU-wide thresholds or managing VAT affairs independently in Spain. These companies may face challenges such as language barriers, unfamiliarity with local deadlines and procedures, and the need for a Spanish tax number. Thus, appointing a fiscal representative can streamline the process, ensuring compliance with local regulations and facilitating communication with Spanish tax authorities.

Property ownership in Spain also necessitates the appointment of a Fiscal Representative for non-residents who own more than two properties. This representative is responsible for handling Income Tax submissions to the Spanish Hacienda annually. While owners of a single property are not legally required to appoint one, doing so is highly advisable to avoid potential fines and ensure proper tax management.

Read our guide on buying property in Spain through a business.

Types of fiscal representation

In Spain, tax representation takes on two distinct forms, each catering to the specific needs of businesses based on their location relative to the European Union:

Voluntary Representation

  •   Applicable to EU-based companies.
  •   Acts as a manager facilitating Spanish trade operations.
  •   Provides ease of managing VAT affairs and compliance.

Compulsory Representation

  • Required for non-EU-based companies.
  • The representative serves as a fiscal agent responsible for VAT matters within Spanish territory.
  • Ensures adherence to Spanish tax laws and regulations.

The legal nature of fiscal representation in Spain is such that it serves as a bridge for companies outside the EU to engage in business activities subject to Spanish VAT. For EU-based entities, although not mandated by law, opting for a voluntary representative can streamline tax management and mitigate potential compliance risks.

Who can be a VAT fiscal representative?

When it comes to designating a VAT fiscal representative in Spain, foreign companies have the latitude to choose a representative that best aligns with their business needs. This can range from engaging with a client or supplier to appointing their own subsidiary or enlisting a firm that specializes in tax representation services. The choice is not limited and can include various professionals such as:

  • Tax consultants, who offer expertise in navigating Spain’s VAT system.
  • Lawyers, providing legal insight into tax obligations.
  • Chartered accountants and sworn accountants, with a focus on financial accuracy.
  • Notaries, ensuring the legality of documents and transactions.
  • Forwarding companies, particularly for assistance with import duties.

Selecting the appropriate VAT fiscal representative involves careful consideration of several factors. It is crucial that the chosen individual or entity possesses an in-depth understanding of Spanish VAT regulations and has experience advising non-resident businesses. Additionally, they should be equipped with advanced technology to automate and execute VAT-related tasks efficiently and error-free.

A multidisciplinary team should be available to address any queries from the client, offering not just corporate compliance to Spain’s regulations but also strategic advice to minimize tax liabilities. Transparency is key; clients must be kept informed about their operations, fostering trust and confidence in the fiscal representation provided. The representative’s ability to present solutions and alternatives for tax optimization is equally important, moving beyond mere preparation and submission of VAT forms.

Choosing the right VAT fiscal representative is pivotal for your business’s success in Spain. Lawants’ specialized lawyers are skilled in Spain’s VAT regulations, offering comprehensive fiscal representation. Our multidisciplinary approach ensures not only compliance but strategic advice to optimize your tax position. With our advanced technology and commitment to transparency, we streamline your VAT management, keeping you fully informed and confident in your fiscal strategy.

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What are the benefits of fiscal representation in Spain?

Appointing a tax representative in Spain comes with a suite of strategic advantages for foreign companies. One of the most significant benefits is the simplicity and cost-effectiveness it offers as an alternative to establishing a physical presence through a branch in Spain or a spanish subsidiary. This approach allows businesses to penetrate the Spanish market without incurring the substantial expenses and administrative burdens associated with setting up and managing a separate entity and its accounting.

A foreign company utilizing a tax representative in Spain is not subject to Spanish corporate tax on its operations. This representative becomes the remote operator, managing all VAT-related obligations, including obtaining a VAT number, submitting periodic declarations, making VAT payments, and filing for VAT refunds on behalf of the company.

For non-EU businesses, designating a tax representative isn’t just beneficial—it’s mandatory. This ensures compliance with Spanish VAT rates, currently at 21%, and reduced rates of 10% and 4%. Moreover, it navigates parafiscal taxes on specific goods or activities. For B2C transactions, it’s important to note the distance selling threshold of €35,000, while B2B transactions can benefit from an optional reverse charge mechanism under certain conditions.

Additionally, intra-Community flows of goods must be reported through Intrastat and EC Sales List declarations. Neglecting to submit EC Sales Lists can result in taxation on intra-Community supplies. Furthermore, tax treaties outline the definition of permanent establishment concerning Corporation Tax, which is crucial for international businesses to understand to avoid potential fiscal pitfalls. 

The expertise of a tax representative can be invaluable in managing these complexities, ensuring that companies remain compliant while maximizing their operational efficiency in Spain.

fiscal representative in spain working on the tax files of a company

What are the services of a tax representative?

A tax representative in Spain offers a comprehensive range of services designed to ensure that foreign companies comply with Spanish tax regulations. These services include:

  • Obtaining an Economic Operator Registration and Identification (EORI) number in Spain, necessary for importing and exporting within the EU.
  • Securing a Spanish tax identification number (NIF) or VAT number for the company.
  • Preparing and submitting VAT returns on a monthly or quarterly basis, along with managing any VAT refunds, compensations, and payments due.
  • Filing Intrastat declarations for companies engaged in trade between EU member states.
  • Receiving and handling all correspondence from the Spanish tax and customs authorities, addressing any issues that may arise and advocating on behalf of the company’s interests.

Furthermore, fiscal representation services extend to:

  • Advising on fiscal status in Spain, which includes guidance on invoicing and applying appropriate accounting procedures.
  • Maintaining and updating VAT books, tracking deduction requests, and preparing annual VAT summaries.
  • Assisting in the event of verifications, investigations, or inspections by the Spanish Tax Agency.
  • Representing the company alongside Spanish authorities to fulfill all VAT obligations.

The role of a tax representative is pivotal in allowing foreign businesses to operate remotely in Spain without being subject to corporate tax. They ensure compliance with all VAT-related responsibilities, facilitating seamless integration into the Spanish market. Depending on the agreement with the fiscal representative, additional services can also encompass invoicing, payment of VAT to the Spanish tax office, and other related activities tailored to the company’s needs.

Required documents to register with the Spanish authorities

For non-Spanish companies aiming to comply with the Spanish tax system, there is a set of essential documents required for registration with the Spanish authorities. These include:

  • The official certificate from the company’s Commercial Register or the public deeds of incorporation, which verify the company’s legal existence and structure.
  • A copy of the passport of the company’s legal representative, ensuring their identity and authorization to act on behalf of the company.
  • A power of attorney and an agency contract, which must be signed by the legal representative of the non-Spanish company, granting authority to the fiscal representative to fulfill tax obligations in Spain.
  • A cooperation agreement and tax representation contract, outlining the terms of engagement between the non-Spanish company and its fiscal representative.
  • Authorization for obtaining an EORI number and linking it to the company’s Spanish tax identification number (NIF N), which is crucial for trading within the EU.
  • A power of attorney that allows the fiscal representative to receive electronic notifications from Spanish authorities on behalf of the company.

It is important to note that these documents require notarization and must bear the Hague Convention Apostille or consulate authentication, accompanied by a sworn translation in Spanish. This ensures that all paperwork meets international legal standards and is recognized by Spanish authorities, facilitating a smooth registration process.

What happens if you fail to appoint a VAT fiscal representative in Spain?

The consequences of not appointing a VAT fiscal representative in Spain can be severe for non-European companies. Without this crucial intermediary, businesses become vulnerable to significant sanctions from the Spanish tax administration. One of the immediate repercussions is the ineligibility to receive any VAT refunds, which can have substantial financial implications. Additionally, European partners, including suppliers, clients, and marketplaces, are likely to refuse to engage in transactions with non-European entities that lack a tax representative. This refusal stems from the increased risk they would incur by conducting business with companies that do not comply with Spanish tax regulations. Therefore, the appointment of a VAT fiscal representative is not only a legal requirement but also a practical necessity to ensure smooth and uninterrupted business operations within Spain.

tax representative for spain and company owner shake hands

Appointment of a tax representative

Securing a tax representative is a critical step that must be undertaken before foreign companies commence any taxable purchase and sales operations within Spain. It is a procedural necessity to ensure that all tax obligations are met in a timely and efficient manner. To appoint a VAT fiscal representative, the foreign company must undertake several key actions:

  • The appointment should be preemptive, occurring before the foreign entity begins its operations.
  • A written agreement is essential, signed by an authorized legal representative of the foreign company.
  • The agreement must specify pertinent details such as the name and address of both the foreign company and the tax representative, along with an express acceptance of the appointment, which includes the effective date.
  • There must be a commitment from the representative to fulfill all VAT obligations on behalf of the foreign company, including tax filing and payments.
  • Finally, this appointment must be formally communicated to the Spanish Tax Agency.

In accordance with Spain’s VAT Act 37/1992, any individual or legal entity with legal residence in Spain is eligible to act as a fiscal representative. The formalization of this relationship typically involves executing a notarial deed that confirms the appointment and the representative’s consent to take on this role. 

While it is not necessary for the representative to be registered in the commercial register, obtaining a tax identification number is imperative. This requires verification of the client’s existence through certified documentation from the relevant commercial register where the client is listed, which may necessitate certified translation if applicable.

What is the cost of a fiscal representative in Spain?

On average, companies can expect to allocate around 250 euros annually for fiscal representation services in Spain. This fee is an investment in securing expert guidance and management of tax reporting and payments, which is indispensable for foreign companies navigating the complex tax landscape of Spain.

Choose Lawants as your fiscal representative in Spain

When it comes to fiscal representation in Spain, choosing a trusted partner is paramount. Lawants stands ready to serve as your dedicated fiscal representative, offering a wealth of experience and a reputation for excellence in the Spanish market. As your intermediary with the tax authorities, we are committed to streamlining communication between your business, clients, and suppliers. Our expertise ensures that your logistical, customs, and tax operations are structured to meet your expectations, minimizing bureaucratic hurdles. Partner with Lawants to simplify your tax obligations and focus on growing your business with confidence.

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