- Royal Decree-Law 3/2020, published on 5 February, brings the European VAT rules known as ‘quick fixes’ into Spanish law.
- They cover call-off stock, chain transactions, the customer’s VAT number and proof of transport between countries.
- Most apply from 1 March: anyone selling to other EU countries should review invoices, contracts and records.
On 5 February 2020 the Official State Gazette published Royal Decree-Law 3/2020 of 4 February, a measure that brings several European Union directives into Spanish law. They include the ones that change VAT on supplies of goods between member states, the so-called ‘quick fixes’, adopted in Brussels in 2018 and 2019 to give certainty to intra-EU transactions.
The decree-law also covers other directives, on resolving tax disputes between states, occupational pension schemes and insurance distribution, but it is the VAT changes that most affect the day-to-day of companies that sell or buy outside Spain. According to the Tax Agency, the rules on proof of transport apply from 1 January 2020 and the remaining changes from 1 March.
What changes in VAT
Three figures change. Call-off stock is goods sent to another country to be held at the disposal of an already identified customer, who will acquire them later: the supply is treated as taking place when the customer withdraws them, subject to conditions and time limits. In chain transactions, where the same goods are sold several times with a single transport between countries, the rule fixes which sale the transport is attributed to and therefore which supply is exempt.
In addition, for a supply to another member state to be exempt, it is not enough for the goods to leave Spain: the buyer must give the seller a VAT number from another member state, and the seller must report the transaction on form 349. Proof of transport rests on presumptions, for example two documents independent of each other, such as the signed CMR or the carrier’s invoice, or one of them together with insurance or proof of payment.
Why it matters to the company
The exemption is the heart of the transaction. If a Spanish company cannot show that the goods reached another country or that its customer has a valid VAT number, the authorities can demand Spanish VAT as if it were a domestic sale, with surcharges and interest. For an exporting small business, that risk can mean a significant amount in a single review.
The new rules also simplify. Call-off arrangements allow stock to be held in a customer’s warehouse in another country without the complexity of registering there, provided the conditions are met. And common criteria for proving transport reduce disputes with the authorities, because they offer a list of documents that are accepted as evidence.
What to review
Before invoicing a customer in the EU without VAT, it is worth checking that its number is valid in the European Commission’s VIES system and keeping the verification. It is also important to review contracts and agreed delivery terms: who transports, who bears the risk and which documents are signed at destination.
Anyone holding stock in other countries or taking part in chain sales should go over with their adviser how those transactions are recorded, and make sure invoicing software is updated in time. A well-kept file of transport documents is today the best defence in any later check.
In intra-EU VAT, what cannot be proved is what ends up being paid.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
