VAT (IVA) for freelancers

It is for anyone considering, planning or carrying out a move to Spain who will invoice as a freelancer. The aim is that you charge and declare VAT correctly for Spanish, EU and non-EU clients.

Start with "How VAT (IVA) works when you invoice: rates, charging and reclaiming". It covers the basics that every other page builds on. Invoice layout and numbering, income tax, and Hacienda notices and penalties are covered elsewhere.

Key rules

• General IVA rate: Most freelance services on the Spanish mainland and Balearics are charged IVA at 21%, with no small-business turnover threshold below which you can skip it.
• EU consumer threshold: Cross-border sales to EU consumers up to EUR 10,000 a year can carry Spanish IVA; above that, the VAT of each customer's country applies.
• Cash accounting limit: Cash accounting is open if your turnover last year was no more than EUR 2,000,000, and IVA is due at the latest on 31 December of the year after the service.
• EU business clients: Invoice business clients in other EU countries without Spanish IVA, add a reverse-charge mention and both VAT numbers, and be registered in the EU operators register first.
• Quarterly VAT return: Modelo 303 is due 1-20 April, 1-20 July and 1-20 October, and 1-30 January for the fourth quarter.
• Small-business exemption: Spain has no turnover threshold that lets you skip IVA, so you charge it from your first invoice.

VAT (IVA) for freelancers: the whole process, step by step

• Work out whether you charge IVA and at which rate: Before your first invoice

• Check whether your activity is exempt, and whether a special regime such as cash accounting suits you: Before you start invoicing, and again if your turnover changes

• Invoice EU and non-EU clients with the right wording; for EU business clients, join the EU operators register first: Before your first cross-border invoice

• In the Canary Islands, Ceuta or Melilla, use the local tax (IGIC or IPSI) and the local authority's forms: From your first invoice if you live or invoice there

• File the quarterly VAT return (modelo 303) for the first three quarters, even with no activity: 1-20 April, 1-20 July and 1-20 October Deadline: 20 April, 20 July, 20 October.

• File the fourth-quarter VAT return: 1-30 January

• Report EU sales with the recapitulative statement (modelo 349) if you trade with EU businesses: In the first 20 days after each quarter, or by 30 January for the fourth quarter

• Correct a wrong return or invoice: As soon as you find the error; the right to request a refund correction lapses after 4 years

Documents you may need

• A full invoice — How VAT (IVA) works when you invoice: rates, charging and reclaiming

• Your IVA purchases book — How VAT (IVA) works when you invoice: rates, charging and reclaiming

• An electronic certificate or electronic DNI — Filing your quarterly VAT return: what goes in and when

• Census declaration — Registering as an EU trader (ROI) and reporting EU sales

• Proof of business use for vehicles and mixed-use items — How VAT (IVA) works when you invoice: rates, charging and reclaiming

VAT (IVA) for freelancers: questions that cross several articles

Do I charge IVA on my first invoice?

Yes, you charge IVA from your first invoice on taxable services in Spain, usually at 21%. Spain has no small-business threshold that lets you skip it. Read "How VAT (IVA) works when you invoice: rates, charging and reclaiming", and "Are your services exempt from VAT? Teaching, health and similar" if you teach or work in health.

Do I still file a VAT return if I had no clients this quarter?

Yes, you file a nil return every quarter while you are registered for IVA. Deadlines are 1-20 April, 1-20 July and 1-20 October, and 1-30 January for the fourth quarter. See "Filing your quarterly VAT return: what goes in and when".

Can I deduct IVA on expenses if the invoice is not in my name?

No, you need a full invoice in your name and with your tax number, and the expense must be linked to your activity. See How VAT (IVA) works when you invoice: rates, charging and reclaiming.

Does my EU client change which rate I charge?

Yes, a business client in another EU country is generally invoiced without Spanish IVA, instead of the usual 21%. You also need to report those sales. Read "VAT on invoices to clients in other EU countries or outside it" and "Registering as an EU trader (ROI) and reporting EU sales".