What is the VAT number

24 Enero 19

The VAT number and the NIF are not the same. We will now introduce the differences between both terms, as the concept has been raising doubts since the SEPA (Single Euro Payments Area) came into force.

As experts in invoicing, we will explain the difference between VAT and NIF, and how it affects the aforementioned single payment system in the European Union countries.

What is the VAT number?

This is an identification number that can only be applied for by companies that are going to have commercial relations with other non-Spanish organizations that belong to the European Union.

This would be somewhat like a European-level NIF, although not exactly so. Spanish companies or freelance professionals are not given a VAT number just because they are a company or a freelance professional.

This number should be applied for to the Agencia Tributaria (the Spanish Tax Agency), and it may be granted or denied depending on several circumstances.

Applying for and obtaining a VAT number

Before a company may be granted its European identification number, it will need to demonstrate to the Agencia Tributaria that the number is really necessary for the company’s activities.

In other words, the company will need to certify to an Hacienda inspector that it has the intention and the possibility to generate invoices to a company located in a different European Union country, and that the VAT number will be needed for this process to be legal.  

If no commercial relation is to be done with companies in the European Union, the VAT number should not be applied for, as it is by no means necessary. If the company applies for the number, but can’t demonstrate (using documents) that the number is necessary, it won’t be granted.

The process may be more or less strict depending on the Spanish region where the company is located. However, many of our clients told us they were required to undergo inspections in their own workplace, where they were asked to provide the following documents:

  • Showing the inspector around the place where the work is done (for people who work from home)
  • Required equipment and material to perform the activity
  • Showing, by means of e-mails or other documents, that the company or freelance professional intends and/or has the possibility to invoice to other companies in the European Union.

That being done, the Agencia Tributaria will study the case for a maximum of fifteen days, after which a letter will be sent to the company or freelance professional stating the decision that was taken.

Keep in mind that Hacienda may consider that you are not eligible for a VAT number, according to their own criteria (authenticy of the documents provided, etc.).

The letter will include supplementary information so that, if you consider it appropriate, you may appeal against the decision.

Checking VIES to find out whether VAT was granted

In order to find out whether a company has been granted a VAT, we may take a look at VIES. This is a registry that shows some VAT-related information for a company. A request to check the VAT number of a company may be filed in two cases:

  • If you have already filed for our identification number to work with companies in other European Union countries, and need it to be approved as soon as possible in order to start invoicing. Even if you did not receive a letter from Hacienda, if your company appears in VIES you may already work using your VAT number.
  • In order to make sure that the company that is invoicing to you (or the company to which the invoice is being sent) is actually qualified to work in the European area.
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