Obtaining this type of tax number is required by European law. All companies in the EU that are VAT registered VAT in a Member State must, due to their trade with any company in another Member State, apply for an intra-EU VAT number. This number is indispensable, business exchanges cannot happen between European countries without it. The number must always be included on invoices, VAT returns, and statements of property exchange for the company.
If you decide to start a business in Spain then you will have to apply for a VAT number. Otherwise called a “VAT identification number” or “Tax number”, this tax code allows billing throughout Europe but also allows an exemption from VAT when invoicing for certain products and services.
This Intra-EU VAT number in Spain has 9 digits in addition to the country code “ES” for Spain. On the website of the General Administration of Taxation you will find the structure of these numbers that are specific to each member state within the European Union.
Before establishing an invoice which is exempt from VAT, you must ensure that your customer is a taxable client from another EU country. Also, if your client’s intra-EU VAT number is reported as ‘invalid’, they should apply to the tax administration and provide a secure certificate issued by this same administration. If they do not send you this document, you should charge your customer with VAT as you would normally. See the European site for Taxation and Customs Union to check the validity of your VAT number or that of your client. Your VAT number and that of your client must always appear on any invoices made. Remember that it is essential that your company, and your client, are both established and based on the European economic area.
To get a VAT number in Spain, it is important to prove to the tax authorities that your business is being carried out on Spanish soil. In order to take advantage of the benefits of intra-EU VAT i.e. making the most of no tax charge across Europe, your company must have a physical presence in Spain. It is possible to justify this physical presence simply by renting a room in Spain with, if required, an employee working there. The lead-time is roughly 3 months and it will be subject to control by a tax administration representative.