Spain VAT rate increase
Friday July 16, 2010
This is a reminder that the standard VAT rate in Spain increase to 18% on 1st July 2010 (previously 16%). The reduced rate has also been increased to 8% (from 7%).
The 4% VAT rate is unchanged.
International VAT News
Spain: VAT Rate Increase
Wednesday June 2, 2010
Just a reminder that on 1st July 2010 the standard rate in Spain will increase from 16% to 18%.
Spain: Implementation of the VAT Package
Wednesday March 17, 2010
The law implementing the VAT Package in Spain was published last week and clarifies the confusion concerning the application of the reverse charge in Spain especially in relation to event organisers.
Before 1st January 2010 a non-Spanish resident organiser of an event or exhibition charged Spanish VAT to non-Spanish companies for event organising services. The original 2010 proposals included a change in the reverse charge rule that meant that the liability to account for Spanish VAT shifted from the non-resident supplier to its non-resident customer irrespective of whether the customer was registered for VAT in Spain. This could have resulted in the customer having to register for VAT in Spain.
This seemed an irrational decision and fortunately the publication of the law last week returned the law to the position prior to 1st January. The change is retrospective to 1st January 2010. So the position now and from 1st January is that the non-resident supplier will continue to be required to be registered for VAT and charge Spanish VAT.
Spain delays VAT Package changes
Thursday January 7, 2010
Tax authorities in Spain have announced that legislation implementing the new VAT Package changes will not be in place until March.
The changes were supposed to have been implemented in January 1st but a lower level resolution from the Spanish General Tax Directorate will be issued instead.
Experts believe that the delay in implanting the VAT Package changes could cause some legal uncertainty and make VAT compliance slightly more difficult for businesses in the interim.
However, the "force of attraction" rule has been removed from Spanish VAT legislation, effective from January 1st.
This means foreign companies including those with a permanent establishment in Spain will not be entitled to charge Spanish VAT to their customers and the reverse change mechanism will be applicable.
Under the force of attraction rule, foreign entrepreneurs with a permanent establishment in Spanish VAT territory were deemed "established" for all transactions taking place in Spain.
The Spanish government recently announced plans to increase the VAT rate by two percentage points later this year.
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Member states requested to comply with EU VAT law
Tuesday November 24, 2009
The European Commission has formally requested a number of member states to amend legislation which allows non-taxable companies to join VAT groups.
According to the European Commission, this current setup is "not in line with the proper application of Article 11 of the VAT Directive".
Proceedings have already begun against Ireland, Spain, Finland, Sweden, Denmark, the Netherlands and the Czech Republic.
The UK government has been given two months to amend its legislation to bring it in line with the EU otherwise the case may be referred to the European Court of Justice.
In the case of Sweden, the proceedings concern the fact that the country limits the VAT grouping system to financial and insurance services, which contravenes the VAT Directive.
Earlier this year in July, the commission adopted a communication on the VAT grouping option provided for in the VAT Directive, which set out how the regulation would be practically implemented. 