How to invoice EU and foreign clients as self-employed in Spain

Before you invoice: classify the transaction

A customer being outside Spain does not determine the VAT treatment by itself. First separate services from goods, identify whether the customer acts as a business or a private consumer, and establish where they are based. This guide focuses on services supplied by a self-employed professional established in the Spanish VAT territory. Goods, the Canary Islands, Ceuta, Melilla and special schemes follow different rules.

Source: Spanish Tax Agency: place-of-supply rules for services.

B2B services to a business in another EU country

As a general rule, when you supply a service from Spain to a business or professional established in another EU country, the service is located where the customer is based and is not subject to Spanish VAT. The invoice must identify both parties correctly and state the relevant VAT treatment, usually reverse charge. Writing “foreign customer” is not enough.

1. 1Confirm that the customer is acting as a business or professional and request their intra-EU VAT number.
2. 2Validate the number in VIES before invoicing and retain evidence of the check. An invalid result can mean that the number does not exist, is not activated for intra-EU transactions or its registration is not complete.
3. 3Check whether you must be included in Spain’s Register of Intra-Community Operators before the transaction.
4. 4Issue a complete invoice and omit Spanish VAT only when the classification and place-of-supply rule support that treatment.
5. 5Include the transaction in modelo 349 when it is a reportable intra-EU supply of services.

Source: European Union: check a VAT number in VIES.

ROI, VIES and modelo 349 are not the same thing

Source: Spanish Tax Agency: ROI registration through modelo 036.

Source: Spanish Tax Agency: recapitulative statement, modelo 349.

B2C services to private consumers in the EU

Under the general rule for services to private consumers, the transaction is located where the supplier is established, so a self-employed professional in the Spanish VAT territory will usually charge Spanish VAT. Some services, particularly electronic, telecommunications and broadcasting services, may instead be taxed where the consumer is based and can trigger schemes such as the One Stop Shop (OSS). Do not apply the B2B rule to a private consumer.

Source: European Commission: how the VAT One Stop Shop works.

Services to customers outside the EU

For B2B services, the general rule also places the transaction where the customer is based, so Spanish VAT is not normally charged. For B2C services, the general rule would usually mean Spanish VAT, but Spanish law contains exceptions for certain services supplied to consumers outside the EU. ROI, VIES and modelo 349 do not apply to a customer in a non-EU country, but you should keep evidence of who the customer is, where they are established and what service they receive.

What the invoice should contain

• A sequential number and series, the issue date and the transaction date when different.
• Your legal name, tax number and address, and the equivalent customer details.
• A clear service description, taxable amount and currency. Show the VAT rate and amount when you charge VAT.
• The customer’s VAT number when required, particularly when the intra-EU treatment depends on their business status.
• The relevant wording if the transaction is exempt or subject to reverse charge. Do not call a transaction “exempt” when it is actually outside the scope of Spanish VAT.

Source: Spanish Tax Agency: mandatory invoice content.

VAT and Spanish income-tax withholding are separate questions

The rule that decides whether you charge Spanish VAT does not decide whether the invoice carries Spanish income-tax withholding. Withholding depends on the nature of your activity, the payer and the applicable income-tax rules. Do not add or remove withholding solely because the customer is abroad. If the payer’s tax residence, a treaty or an obligation in another country is relevant, the case needs individual review.

Source: Spanish Tax Agency: withholding and payments on account.

Four examples to start the review

• A consultant in Madrid supplies services to a French company and both have valid intra-EU VAT numbers: the consultant will normally invoice without Spanish VAT under reverse charge, retain the VIES validation and review modelo 349.
• A designer in Spain supplies an ordinary service to a private consumer in France: the general rule is to charge Spanish VAT unless a special place-of-supply rule applies.
• A consultant in Spain supplies services to a US company: under the general B2B rule the consultant will normally not charge Spanish VAT, but should document the customer’s business status and establishment. ROI, VIES and modelo 349 do not apply to that transaction.
• A self-employed professional in Spain buys a SaaS subscription from an Irish company: this is a received, not supplied, intra-EU service. Review both VAT numbers, reverse charge, modelo 303 and modelo 349 when applicable.

Checklist before you issue the invoice

1. 1Confirm whether you are selling goods or services.
2. 2Classify the customer as a business/professional or a consumer and document where they are established.
3. 3Check whether a special place-of-supply rule applies to the service.
4. 4For intra-EU B2B services, review ROI, validate VIES and save the result.
5. 5Determine the VAT treatment and review income-tax withholding separately.
6. 6Include the correct wording on the invoice and record the transaction.
7. 7Flag it for modelo 349 when applicable and retain it for the Spanish tax close.

What Finlai can review and when you need another specialist

Finlai can help you organise invoices and records for your Spanish activity, review the treatment of your Spanish tax obligations and prepare the returns included in your plan when applicable. You can communicate with your advisor in English about these transactions and identify the country, customer type and VAT number in your records.

For the ordinary service and its limits, see what Finlai’s English-speaking accountant service includes.