VAT on invoices to clients in other EU countries or outside it

Terms used

• IVA — IVA is Spain's value-added tax, charged on most goods and services.
• Inversión del sujeto pasivo — Inversión del sujeto pasivo is the reverse charge: the client, not you, reports the VAT in its own country.
• ROI — The ROI is the register of EU operators, which you must be in before invoicing EU clients without IVA.
• Modelo 303 — Modelo 303 is the quarterly VAT return.
• Modelo 349 — Modelo 349 is the summary return of your operations with EU businesses.
• One Stop Shop — The One Stop Shop (OSS) lets you declare and pay other EU countries' VAT on consumer sales through one Spanish return.

Key rules

• EU business clients: Invoice without Spanish IVA, add the reverse-charge mention and both VAT numbers, and be in the ROI first.
• EU consumers: Sales up to EUR 10,000 a year can carry Spanish IVA; above that, each customer's country VAT applies.
• Non-EU clients: Services to clients outside the EU are generally not subject to Spanish IVA, but keep proof of the client's status and location.
• Exceptions: Real estate, transport and event services follow special place-of-supply rules.

The short answer

Two questions decide your invoice: is the client a business or a consumer, and where is it established? The decision below walks you through the options. This page explains the reasoning and the exceptions.

Business client in another EU country

You invoice without Spanish IVA. Services to a business are taxed where the client is established, and the client reports the VAT in its own country. This is called the reverse charge.

On the invoice:

• Add the reverse-charge mention, "inversión del sujeto pasivo".
• Show your VAT number and the client's VAT number.
• Make sure you are already in the ROI before you invoice.

You then report the operation in your quarterly modelo 303 and in modelo 349. The checklist below covers the steps, including checking the client's VAT number.

Consumer in another EU country

The general rule places the supply where you are established, so you charge Spanish IVA. There is one important limit. 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.

Telecom, broadcasting and electronic services to EU consumers are taxed in the customer's country. Real estate services, events and some transport also go to the customer's country.

If you go above the limit, or choose to apply destination VAT from the start, you can report it through the One Stop Shop (OSS). You register with the tax agency using modelo 035 and file quarterly returns with modelo 369. Once you choose this option, it lasts at least two calendar years.

Client outside the EU

Services to a business outside the EU are generally not subject to Spanish IVA, because they are taxed where the client is located. The same applies to certain listed services to private consumers outside the EU, such as consultancy, legal, advertising and IT services.

Issue the invoice without IVA and state that the service is not subject to Spanish IVA under the place-of-supply rules. Keep proof of the client's business status and location. Report the operation in modelo 303. It is generally not part of modelo 349, which covers EU operations.

If you are based in the Canary Islands, Ceuta or Melilla, ask the tax agency, because special rules apply there.

Exceptions to watch for

Some services have their own place of supply, whoever the client is. These include services linked to real estate, passenger transport, cultural or event services. For these, check the treatment with a tax adviser or the tax agency before you invoice.

Common mistakes

• Invoicing without IVA before checking the client's VAT number.
• Treating a sole trader who buys for private use as a business.
• Forgetting modelo 349 for EU business clients.

Choosing between options

Which VAT treatment applies to this invoice to a client abroad?

• EU business client: no Spanish IVA, reverse charge: The client is a business in another EU country. Invoice without IVA, add the reverse-charge mention and both VAT numbers. The client pays VAT in their own country.

• EU consumer: charge Spanish IVA: The client is a private person in another EU country and your cross-border sales to EU consumers stay up to EUR 10,000 a year.

• EU consumer: charge the customer's country VAT: Your cross-border sales to EU consumers go above EUR 10,000 a year, or you opt in.

• Client outside the EU: no Spanish IVA: The client is a business outside the EU, or a private client buying a listed service such as consultancy, legal, advertising or IT. Invoice without IVA, citing non-subjection under the place-of-supply rules.

First ask whether the client is a business or a consumer, then where it is established. Real estate, transport and event services, and telecom, broadcasting and electronic services to consumers, follow their own place-of-supply rules.

What to check before invoicing a client abroad

Before you send an invoice to a client abroad

• Confirm the client is acting as a business or professional, not as a consumer, by asking for their company details and VAT number.

• Check the VAT number on the European Commission's VIES tool by entering the country code and the number.

• Save proof of the check: ask for the qualified confirmation with its consultation identifier, or keep a dated screenshot or PDF with the invoice file.

• Try again later if VIES is temporarily unavailable, and do not issue the invoice without a valid number.

• Confirm you are already in the EU operators register (ROI) before you invoice.

• Work out the place of supply: for business clients it is normally where the client is established, but check special rules, for example for services linked to property.

• Write the invoice without Spanish IVA, add the reverse-charge mention ("inversión del sujeto pasivo") and show both VAT numbers.

• Report the operation in your quarterly VAT return (modelo 303) and file modelo 349, the summary of EU operations.

Frequently asked questions

Do I charge Spanish IVA to a client outside the EU?

Generally no, if the client is a business outside the EU, because the service is taxed where the client is located. The same goes for some listed services to private clients outside the EU, such as consultancy, legal, advertising and IT services.

Which services to a client abroad are exceptions to the usual place-of-supply rule?

Services linked to real estate, passenger transport and events have their own places of supply, so the usual rule may not apply. Services tied to property in Spain stay in Spanish IVA even for a non-EU client. Check the exact service type with your tax adviser before invoicing.

How do I report EU consumer sales through the One Stop Shop?

You register with the AEAT, Spain's tax agency, using modelo 035, then file a quarterly return on modelo 369 through the Spanish tax portal. This applies once you pass the EUR 10,000 threshold or choose to opt in. If you opt in, the choice lasts at least two calendar years.

Which consumer services are taxed in the customer's country even below the EUR 10,000 threshold?

Telecom, broadcasting and electronic services to EU consumers are taxed at destination. Real estate related services and events also go to the customer's country. For other services to consumers, Spanish IVA applies up to the threshold.