Learn about some basic tax aspects if you operate in our country without a permanent establishment
The globalized environment in which we live leads many companies to seek to expand their operations into other countries. This internationalization occurs both on the part of Spanish companies looking to do business abroad and on the part of foreign companies interested in trading in Spain.
In an economic scenario like the one described, we often encounter companies not resident in Spain that conduct business in our country without a Permanent Establishment. In this article, we want to explain the specific tax obligations that apply in these situations.
a).- Obtaining the NIF
Because the foreign company will be conducting operations in Spain and receiving services, it must obtain a Spanish Tax Identification Number (NIF) from the Spanish Tax Administration. This NIF will begin with the letter N.
To obtain this, foreign entities must submit form 036, an official document proving the company's existence in their country, a photocopy of the tax identification number (NIF) of the person signing form 036, and a photocopy of the document proving that the person signing the form has sufficient power of attorney. These documents must be translated into Spanish and apostilled under the Hague Convention.
In the case of non-resident business owners or professionals, they must apply for the NIF using form 030, and providing a copy of their passport.
Currently, it is possible to process the NIF application for non-resident individuals and entities at the Tax Agency Administrations in Spain or at Spanish Consular Offices abroad.
b) Obtaining the electronic certificate
Once the NIF has been obtained, the non-resident person or entity must manage the acquisition of the electronic certificate from the National Mint and Stamp Factory at any Tax Agency Administration in Spain or Spanish Consular Office abroad.
With an electronic certificate, individuals or entities can interact with the Spanish tax authorities electronically through the website of the State Tax Administration Agency. To do so, they must subscribe to the Secure Electronic Notification Service for communications from the Tax Agency.
c) The communication to the tax authorities of the company representative and their tax obligations
In addition to being used to request the NIF of the non-resident person or entity, form 036 will also serve to appoint, if necessary, the representative, natural or legal person, who represents them before the Spanish tax administration, and to indicate the applicable VAT regime.
In the event that non-resident persons or entities intend to make intra-community deliveries or acquisitions, they must apply for a VAT number, registering in the "Register of intra-community operators" (ROI), also using form 036. The assignment of the VAT number will mean that the operator will be included in the VIES census (VAT Information Exchange System).
d) Value Added Tax (VAT)
In principle, all businesses registered as VAT taxpayers are required to file quarterly returns (which in some cases must be monthly), regardless of whether they have carried out any transactions during the corresponding quarter (or month). Those who exclusively carry out transactions exempt from VAT and have no right to deduct VAT are not required to file returns.
Non-resident individuals or entities without a permanent establishment that invoice with Spanish VAT must file their VAT return within the first twenty calendar days of the month following the corresponding monthly or quarterly settlement period, as applicable (thirty days in the case of the last settlement period of the year) using form 303.In addition, taxable persons must also file an annual summary return (form 390).
e) Non-Resident Income Tax (IRNR)
Meanwhile, residents pay taxes through Personal Income Tax (IRPF) or Corporate Income Tax (IS); taxpayers in the Non-Resident Income Tax (IRNR) will be "the persons or entities not resident for tax purposes who obtain income in Spanish territory.".
In general, non-resident individuals or entities are required to file a self-assessment of IRNR for all income obtained in Spanish territory, except for income on which the appropriate withholding tax has already been applied or income subject to withholding but exempt under the provisions of the Tax Law or an applicable Double Taxation Agreement.
The declaration and payment of the tax debt may also be made by jointly liable parties, representatives and, in the case of declarations to be refunded, withholding agents.
If you would like further information on the various aspects discussed in this article, please contact us. At Àmbit Assessor, we are experts in national and international taxation and would be happy to assist you.
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A graduate in Business Administration from the University of Barcelona, she continued her education with a Postgraduate Diploma in Accounting and Management Control from Pompeu Fabra University, and completed various courses in tax and fiscal matters offered by the Terrassa Chamber of Commerce, the Barcelona Bar Association, and the Center for Financial Studies. Before joining Àmbit Assessor in 2001 as a tax and accounting consultant, she worked as an administrative assistant at Caixa Manresa and Banc Sabadell and as a tax information call center operator at the Spanish Tax Agency. For three years, she served as treasurer of the L'Alzinar Recreational and Cultural Society, a position she held concurrently with her work at Àmbit Assessor.
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