Purchases and sales with the United Kingdom
Sale of goods to companies
From 2021, the United Kingdom will be a non-EU country for all intents and purposes, which has the following consequences:
The advantage of this change is that the transactions no longer have to be included in the recapitulatory return of intracommunity transactions (form 349) or the Intrastat declaration.
Furthermore, Spanish companies that do business with the United Kingdom do not have to identify themselves by means of the NIF-IVA (TIN-VAT number), although to carry out customs operations (imports or exports), they must have an EORI number.
It must be taken into account that, as stated in the subheading, when it comes to VAT, Northern Ireland is still part of the EU with regard to the supply of goods. To this end, the United Kingdom will create a specific NIF-IVA (TIN-VAT number) with the prefix XI.
Selling goods to individuals
The distance selling system that establishes that companies have to register in the United Kingdom, charge the British VAT and pay it when a certain annual turnover is exceeded, is no longer applicable, which means that from the first euro the sales are considered to be exports. So, Spanish companies must not charge VAT for sales to individuals, regardless of their annual turnover.
Services to the United Kingdom
Services to companies
The general rule regarding the place of supply of services applies when the recipient of the service is established in the EU and also if they are established elsewhere. Therefore, from 2021, procedures are the same as they have been up to now for services provided to British companies.
Additionally, procedures associated with services provided by companies established in the United Kingdom, from 2021, shall continue to be the same as they have been up until now: the British company continues to invoice without VAT and the Spanish company must reverse charge the tax.
However, there are certain services that are listed in article 69. Two of the VAT Law (advertising, advice, auditing, etc.), in which when the company that is the recipient of the services provided is established outside the EU and the service provided is used in Spain, the aforesaid general rule regarding the place of supply of services does not apply. That is to say, in these cases the services are considered to have been supplied in Spain, which means that the company must charge Spanish VAT.
Services to individuals
Just like with the services that are provided to companies, the general rule for services provided to individuals is the same, that is to say, the services are considered to have been supplied in Spain and the Spanish VAT is charged.
Moreover, with regard to the services mentioned in article 69. Two of the VAT Law (advertising, advice, auditing, etc.), if the individual is established outside the EU, the service rendered is considered to be located in the country of the recipient. So, companies that supply this type of service to individuals from the United Kingdom no longer have to charge the Spanish VAT. This means that the Spanish company must register in the United Kingdom for the purposes of VAT and charge the tax that is required by the British authorities.
Furthermore, when it comes to e-services supplied to individuals in the EU, the companies must charge the VAT that is applicable in the country where the recipient is located. To this end, they can make use of the “Mini One Stop Shop”, which enables them to pay all the VAT charged in the EU through the Spanish Tax Agency. This system is no longer applicable, which means that the affected Spanish companies also have to register with the British Tax Authorities and pay the British VAT charged there.
VAT paid in the United Kingdom
If a Spanish company incurs expenses and VAT is paid on these in other EU countries, to get this tax back, they can request the refund of the VAT paid by filling in form 360. Accordingly, it will be the Spanish Tax Agency that, on behalf of the Spanish company, deals with the tax refund in the United Kingdom.
From 2021 onwards, if a Spanish company pays VAT in the United Kingdom it can no longer request the refund of such through the form 360. It can only request the refund of this VAT through the British authorities if Spain has signed a reciprocal treatment agreement. On the 5th of January, 2021, the Decision from the Dirección General de Tributos (Spanish Directorate General for Taxes), dated the 4th of January, on the refund of the VAT to entrepreneurs or professionals established in the United Kingdom and Northern Ireland was published.