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How to invoice foreign customers from Spain?

For all those entrepreneurs who do business in Spain and are looking to expand their business, have you ever encountered requests from other countries? Do you know how to invoice foreign clients? In this article we tell you the basic regulations in the case of EU and non-EU buyers.

Aspects to take into account when invoicing a foreign customer

With the advent of globalization, more and more companies and freelancers are providing their products or services to different countries. But have you ever wondered what should I know before issuing an invoice to foreign customers?

First of all, you must know the customer’s situation: where he resides, what type of buyer he is and whether he wants to purchase a product or a service, since the VAT rate may vary depending on these circumstances.

On the other hand, remember to take into consideration whether the transaction will be made to a country belonging to the European Union or not and what type of currency it handles.

 

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Requirements for invoicing foreign customers from Spain

If you have a business in Spain and you are interested in offering your product or service not only within the country, but also to foreign customers, it is common to have prior approval from the Tax Authorities and comply with the regulations according to each situation. Below, we will tell you about the process for invoicing foreign customers:

Invoicing foreign customers in the European Union

If your customer belongs to a member state of the European Union, then we are talking about an intra-community operation, which can be directed towards a company or professional, or directly towards an individual:

In the case of professionals or companies in the EU

The first thing you must do to be able to invoice foreign clients, whether they are companies or professionals, is to register with the ROI (Intra-Community Operators Regime). And you will wonder how is the process?

Do not worry, the procedure is usually quite simple. You will have to fill in the Form 036, so that later you can be assigned the NIF-VAT and be able to invoice the companies you want from the Member States.

In addition, you will be able to declare your intra-community invoices through Form 349, and usually in the VAT Forms 303 and 390.

 

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For individuals in the EU

On the other hand, if you are offering a good or service to foreign intra-community individuals, there will be a change in the VAT tax treatment:

Spanish regulations establish that, if we invoice a service to a private customer in the EU, it must be taxed in the country of origin (Spain) and it will be taken as a national transaction. Therefore, it must be included in the Model 303 and 390.

With respect to the invoicing of goods, taxation is also established in the country of origin.

Finally, in the case of distance sales to individuals, a Special Regime is mentioned. In the first instance, when referring to services rendered by electronic means, telecommunications, radio and television broadcasting, the following is established:

  • As long as the amount of 10,000 euros is not exceeded, the services offered will be subject to VAT of the Member State in which the supplier in question is established.

  • There is the possibility of applying the one-stop special schemes for entrepreneurs or professionals who are not resident in the Community, but are registered for VAT purposes in a Member State.

And with the recent regulations, this means that, as of July 1, 2021, these transactions will be taxed in the Member State where the recipient receives the goods.

However, if the transaction exceeds 10,000 euros and is carried out by entrepreneurs established in a single Member State, VAT must be applied in the country of origin.

Invoicing customers outside the European Union

If you are planning to invoice a foreign customer outside the European Union, then we will no longer refer to an intra-community operation, but to an export.

In this regard, Article 21 of the VAT Law establishes that exports of goods are exempt from tax if the final recipient is a company, a professional or even an individual.

This means that it is not necessary to be registered in the ROI for this type of customer, and that the commercial invoice when issued must state the VAT exemption, in accordance with Article 21.1 of Law 37/1992.

Additionally, it is important that you can justify your exports to the Treasury, for which you must have support of:

  • Commercial invoice

  • International transport document

  • Customs export declaration (SAD)

Exports of goods to companies outside the EU are exempt from VAT. However, in the case of the provision of services to individuals, VAT is payable.

Do you already know in which cases you will have to charge VAT on your invoices and in which cases VAT is exempted? To help you, we have created the following summary table:

 

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Going from invoicing in Spain to capturing a new market and invoicing foreign clients is the goal of many entrepreneurs today. Do you feel identified? In TAS Consultancy we explain step by step the regulations that you must comply with when making your transactions, but if you still have doubts about it, just enter our website and contact our tax experts!

 

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