What is a digital certificate and what is it for?
A digital certificate provides a means to guarantee on a technical and legal level the identity of a person on the internet. Furthermore, it allows that person to electronically sign documents, proving the authenticity of their signature to the person receiving it.
Therefore, an electronic certificate is a digital signature that is registered on your browser and allows your identity to be guaranteed on the internet.
The digital certificate provides access to public entities such as Inland Revenue, Social Security and the Companies Register. Having this certificate allows you to make tax returns, sign documents and carry out other operations.
Who is obliged to have a digital certificate?
The Common Legal Framework and Administrative Procedure Act states which notifications and administrative communications require electronic means for their presentation before Inland Revenue. The obligatory electronic submissions are as follows:
- Corporate bodies (business partnerships, for example) and economic organizations without legal personality (joint ownerships, recumbent inheritances, etc).
- Those who belong to a professional regulatory body (lawyers, medical doctors, architects, etc).
- Those persons who legally represent a third party who is obliged to present documentation electronically to the authorities.
- Civil servants.
- Tax payers belonging to the Register of Large Companies.
- Those who present fiscally consolidated taxes for Corporate Tax authorities.
- Those who belong to a special VAT regime
- Those who are registered with the VAT Monthly Return Register (REDEME).
- Those who are authorized to present customs declarations via an electronic data interchange (EDI).
Do you fall into one of these categories and don’t have a certificate? The consequences of not having a certificate are outlined below.
What happens if you don’t have a digital certificate?
Perhaps you are under obligation to communicate officially with Inland Revenue via a digital certificate but you are unaware of this. Or maybe you have been made aware of this obligation but are not heeding it. Either case could be considered a tax violation and could lead to a fine.
Tax violations are divided into three classes: minor, serious and very serious. The penalties that may arise are economic and could take the form of a monthly deduction of a fixed amount or could be a fine based upon the amount in question (for example, 20% of the tax due).
Moreover, Inland Revenue could take into consideration the following factors in order to further compound the fine, such as:
Covering up data. This happens when we do not file a mandatory declaration or when we do so with false information. For example, we fail to mention one source of income the company has had over a set period of time.
Using false invoices or other fraudulent documentation
- The use of a third person. For example, when a third person is named as owner of your assets.
- The use of fraudulent means, such as having different sets of accounts for the same company or using false information when bookkeeping.
How can you obtain a digital certificate?
If you want to start up a business in Spain and obtain a digital certificate, you must follow these steps:
- You need to grant a special power of attorney. LEIALTA, as business advisors for Spanish companies, will issue a power of attorney in which an individual (one of the lawyers from our firm) will be authorised to carry out the administrative formalities in order to obtain a digital certificate. The details of the power of attorney must be checked with Inland Revenue to ensure that it is not rejected by Spanish administration afterwards.
- Posting the power of attorney and validating it. The power of attorney is sent to the foreign country for it to be validated in front of a Notary Public who will affix an apostille from the Hague Convention (unless the country is not a signatory to the Hague Convention, in which case the document can be validated at the Spanish embassy or consulate in the country where the validation is taking place) and must be translated by a sworn translator.
- Preparation of a Certificate of Good Standing. In this document several pieces of information are accredited:
- That the company exists in the home country
- That the company is authorized for the activity it undertakes
- That the person signing the power of attorney is a member of the board of administration of the partnership.
- That this person still maintains authority to act on behalf of the company.
This certificate must also carry the Apostille of the Hague Convention and be translated by a legal translator.
- Posting of original documentation. The foreign company sends the power of attorney and the original certificates by ordinary post to the person who has been authorized to carry out administrative formalities and obtain the digital certificate on their behalf.
- Obtaining a National Mint software–based electronic certificate. This so-called FNMT certificate is obtained online and provides you with a financial recognition code that is authorized by the National Mint.
- Requesting an appointment with Inland Revenue. An appointment must be sought with Inland Revenue to hand in the paperwork. Inland Revenue then send an e-mail with a link which you must follow to fill in the Tax Code of the company and its FNTM certificate.
- Paying taxes and downloading the certificate. The relevant taxes are paid and the certificate is downloaded.
- From that moment onwards, Inland Revenue will carry out all notifications of a general nature via the email address issued (DEH, acronym for Dirección Electrónica Habilitada meaning Recognized E-mail Address). Inland Revenue will send a paper notification of your inclusion in the DEH System.
- Notifications are accessed via this system using the electronic certificate and the required fiscal action can be carried out by you or your nominated legal representative as per the power of attorney.
It is also important to bear in mind the following:
- From the moment you are informed that you have a DEH (Recognized E-mail Address), you will not receive communications via any other means.
- The company is obliged to have the necessary systems available to access the DEH system without the digital certificate.
- Notifications are considered to have been delivered by the authorities as soon as the content has been accessed by a click.
Bearing in mind the above, it is important that you frequently access the notifications in order to avoid problems with Inland Revenue or a fine.
How can LEIALTA help?
Starting a business in Spain requires diverse procedures which imply an understanding of Spanish legislation and experience of working with Spanish Inland Revenue.
In LEIALTA, we can help in the following ways:
- We can carry out a study prior to setting up a business in Spain in order to provide advice for your case and explain the best way to set up a business.
- We will act as your fiscal representative. Those who are not resident in Spain but wish to carry out an economic activity in this country must, by law, name a fiscal representative who is a tax resident in Spain.
- We offer a cash handling service. It is often difficult for a foreign company with no permananent fixture in Spain to open a bank account here. That is the reason why we offer a cash handling service. This service allows you to invoice your clients, pay suppliers, make Social Security payments and settle accounts with Inland Revenue.
Do you need help starting a business in Spain? Look no further! Give us a ring!