VAT fiscal representation in Spain: when it is mandatory for foreign companies

Is your company foreign and planning to carry out commercial activities in Spain? If so, you will likely need to register for Value Added Tax (VAT) in Spain and, in certain cases, appoint a VAT fiscal representative.

In this post, we’ll tell you what a VAT fiscal representative is, which functions he/she performs and when she/he is needed.

What is a VAT fiscal representative?

A VAT fiscal representative in Spain is an individual or legal entity appointed by a foreign company that is required to register for VAT in Spain.

Appointing a VAT fiscal representative, in that case, is compulsory and it is stated in Article 164.One.7º of the Spanish VAT Act (Law 37/1992), which regulates the obligations of the taxpayers. It states the following:

To appoint a representative for the purposes of compliance with the obligations imposed in this Law when it comes to a taxable subject that is not established in the Community, unless they are settled down in the Canary Islands, Ceuta or Melilla, or in a State in which exist mutual assistance instruments analogous to those instituted in the Community.

The appointment of a VAT representative in Spain depends on where the company is established:

• Optional for companies established within the European Union.
• Mandatory for companies established outside the European Union, unless an applicable mutual assistance agreement exists.

This distinction has become particularly relevant following Brexit and in complex international operations.

When is it mandatory to appoint a VAT fiscal representative in Spain?

In general terms, a non-EU company carrying out taxable transactions in Spain must appoint a VAT fiscal representative, except in limited cases (for example, certain customs or free zone operations, or where specific mutual assistance agreements apply).

Therefore, before starting activities in Spain, it is essential to analyse the company’s place of establishment and the nature of the transactions to determine whether the appointment is compulsory.

Exceptions: mutual assistance agreements?

Appointing a VAT fiscal representative in Spain is not required if the company is established in a country that has mutual assistance agreements in VAT matters equivalent to those in EU legislation.

Each case must be assessed individually to confirm whether the agreement meets the required standards.

Special VAT regimes (OSS and IOSS)

In certain transactions, particularly in e-commerce, companies may opt for special schemes such as:

• OSS (One Stop Shop).
• IOSS (Import One Stop Shop).

Depending on the structure of the operation and the country of establishment, it may not be necessary to appoint a VAT representative in Spain, as VAT obligations can be centralised in another EU Member State.

However, this must always be analysed carefully from a Spanish VAT perspective.

What are the functions of a VAT fiscal representative in Spain?

The services performed by the VAT fiscal representative are:

• To ensure compliance with all the VAT obligations in Spain. This involves obtaining a VAT number for the company, advising on the form of invoicing, applying the corresponding accounting procedure, filing VAT forms, paying the corresponding settlements, handling requests for VAT refunds, maintaining and updating VAT books, following up on deduction requests, preparing the annual summary, etc.
• To advise the company in the event of a verification, investigation or inspection by the Spanish Tax Agency.
• To answer alongside the foreign company for all VAT obligations.

Who can act as a VAT fiscal representative in Spain?

A foreign company that needs to appoint a VAT fiscal representative will be free to choose whoever it wants for this purpose. Therefore, it can appoint a client, a supplier, its own subsidiary in Spain or a company specialized in tax representation services. In this way, LEIALTA offers the service of legal and fiscal representation to help those companies that wish to establish themselves in Spain and carry out activities in our country.

How is a VAT fiscal representative appointed in Spain?

To appoint a VAT fiscal representative, it is necessary to consider the following:

• The appointment must be made prior to the start of the operations of the foreign company.
• The appointment must be made in writing, and it must be signed by a legal representative of the foreign company.
• The appointment must contain the following:
  • Name and address of the foreign company.
  • Name and address of the tax representative.
  • Express acceptance of the appointment of the tax representative selected and the date from which the appointment will be effective.
  • Commitment of the representative to comply with all the foreign company’s VAT tax obligations (such as filing and payment of the tax).

• The appointment must be communicated to the Spanish Tax Agency.

What should be considered when choosing a VAT fiscal representative in Spain?

Choosing the right professional to act as a VAT fiscal representative in Spain is essential to ensure that all tax obligations are met. One should consider:

• That the person or the entity appointed has a thorough knowledge of the VAT regulations applicable in Spain and has experience in advising non-resident entrepreneurs.
• That they have the necessary technology to automate the tasks related to VAT and to do them without errors.
• That it involves a multidisciplinary team available to answer any questions the client might have.
• That they know how to provide solutions and alternatives to reduce the tax burden of the company, instead of just preparing and submitting VAT forms.
• That the VAT fiscal representative is transparent so that the client always knows the operations that are being carried out and why. In this way, total confidence will be generated.

The relationship between the VAT fiscal representative and the foreign company is typically ongoing. Therefore, clear communication, trust and technical expertise are essential to ensure the service is provided correctly and efficiently.

At LEIALTA, we have a specialised team in VAT fiscal representation and advisory services for non-resident companies wishing to operate in Spain. We support international businesses in structuring their VAT obligations properly and operating with full legal certainty in Spain.