You invoice outside Spain and the VAT gets complicated

Invoicing an EU client without VAT: when and why

The general rule when you provide a service to a business in another EU country is straightforward: you issue the invoice without Spanish VAT and apply inversion del sujeto pasivo, the reverse charge. It means you do not charge the VAT, your client accounts for it in their own country. That is why your invoice to that German, French or Dutch company has no VAT line, unlike the one you would send a client here.

Beware a common mix-up: that invoice without VAT is not a franchise for invoicing little. As of today, Spain has no VAT exemption for earning under 85,000 euros a year; we cover it in the guide on the myth of invoicing without VAT below 85,000 euros. You invoice without VAT because it is a business-to-business intra-EU operation, not because of your turnover.

For that invoice without VAT to be correct, three things must line up: your client must be a business or professional (not a private individual), they must have a valid NIF-IVA in VIES, and you must be registered as an intra-EU operator. If your client is a private individual in the EU, the rule changes and the operation generally carries VAT, so the first step is always to know who you are invoicing.

The EU is not abroad as a whole: intra-EU versus export

This is the mistake that costs the most: assuming everywhere abroad works the same way. It does not. An intra-EU operation is only one you carry out with the other 26 EU member states. The rest of the world are third countries, and the rules there are different.

• The United Kingdom: since Brexit it is no longer EU territory. Invoicing a British company is not an intra-EU operation and does not go in modelo 349. Only one special case remains, trade in goods with Northern Ireland, which keeps VAT numbers with the XI prefix.
• Switzerland: it has never been in the EU. It is a third country for every purpose.
• The United States and the rest of the world: third countries. A service to a client there is usually located outside the EU, and a sale of goods is an export, each with its own treatment.

The practical upshot: before you decide no VAT plus 349, first check whether your client is even inside the EU. Putting a US or Swiss invoice in the 349 is as much a mistake as forgetting the German one.

Before the first invoice: ROI, NIF-IVA and the VIES check

Invoicing the EU without VAT is not automatic: there is a prior step many people discover too late. You have to register in the ROI (Registro de Operadores Intracomunitarios, the register of intra-EU operators) by filing modelo 036 (the tax registration form). That registration gives you your NIF-IVA, which is your NIF or NIE with the ES prefix in front, and puts you in VIES, the EU-wide database of intra-EU operators.

From then on, the routine before each invoice without VAT is to check in VIES that your client's NIF-IVA shows as valid. If it does not appear, the general rule is that you must charge Spanish VAT. Always keep proof of that check: it is your backup if the tax office asks. And it works both ways, because your EU client will also look up your NIF-IVA in VIES before accepting your invoice.

One important clarification about tools: our NIF, NIE and IBAN validator checks that a NIF-IVA is well formed (that it has no typo in the control digit), but it does not query VIES or confirm that the client is registered as an intra-EU operator. Only VIES tells you that. They are two different checks: the format of the number on one side, the actual registration on the other.

Modelo 349 and why it has to match your 303

Modelo 349 is the recap declaration of your intra-EU operations: you report, client by client, those invoices without VAT. Nothing is paid with it, it is purely informative, but it is mandatory from the first invoice, with no minimum amount. Most freelancers file it quarterly, as long as their supplies of goods and services to the EU do not exceed 50,000 euros per quarter; above that figure, it becomes monthly.

The deadlines: the first 20 days of the month after the quarter, with one important exception, the fourth quarter is filed during the first 30 days of January. And a detail that saves work: the 349 is only filed for periods in which you actually had intra-EU operations.

Here is the key that trips people up: those same operations also live in your modelo 303, the periodic VAT return, in their own specific boxes. The tax office cross-checks the two forms, so a 303 showing intra-EU operations with no 349 filed is an inconsistency that is very easy to spot. That is why kontora builds your 349 draft from the same invoices that feed your 303: both forms match, and we explain what goes in each box. The full detail is in the modelo 349 guide.

How kontora helps (and what stays your job)

Let us be clear about what kontora does and does not do. kontora generates and guides; it does not file your taxes for you.

• It builds the draft of your 349 and your 303 box by box, from your real invoices, so the two match each other.
• It explains each box: what is reported, where each intra-EU invoice goes and why.
• It guides you through the prior check, reminding you to look up your client's NIF-IVA in VIES before you issue the invoice without VAT.
• It watches the BOE (Spain's official gazette) and warns you of every deadline, including the fourth-quarter one in January, which fills up fast among the other forms.

The final filing on the AEAT (the Spanish tax agency) website is done by you or your gestor, with the matched draft already in front of you. kontora keeps double-entry accounts, is multi-company (your SL and your autonomo, self-employed, activity in a single account) and works in Spanish, English and Russian. We are in free beta with a waiting list.

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