IVA for Spanish IT freelancer invoicing UK company

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IVA for Spanish IT freelancer invoicing UK company


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Old 12th August 2020, 07:24 PM
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Default IVA for Spanish IT freelancer invoicing UK company

Hi all,

I live in Spain but I have just been offered an IT job with a UK company but they want to take me on as a contractor so they don't have to deal with Spanish tax etc.

I have been reading about the freelancer taxes but I can't understand the IVA and whether I or they have to pay it in this situation.

So say I have agreed with them a fee of 2000Euros a month.

They are Vat registered.

1.) Do I have to add IVA of 21% to this and bill them for 2420? Even though they're not in Spain? Then I'd have to pass this 420 to the Spanish government?

2.) Will they be expecting this, or will they be expecting that the 2000 agreed figure already includes spanish VAT (they won't know what IVA.

3.) if they have to pay this, can they reclaim it?

How does it all work?

Thanks

N

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Old 13th August 2020, 05:26 AM
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Quote:
Originally Posted by neorich2002 View Post
Hi all,

I live in Spain but I have just been offered an IT job with a UK company but they want to take me on as a contractor so they don't have to deal with Spanish tax etc.

I have been reading about the freelancer taxes but I can't understand the IVA and whether I or they have to pay it in this situation.

So say I have agreed with them a fee of 2000Euros a month.

They are Vat registered.

1.) Do I have to add IVA of 21% to this and bill them for 2420? Even though they're not in Spain? Then I'd have to pass this 420 to the Spanish government?

2.) Will they be expecting this, or will they be expecting that the 2000 agreed figure already includes spanish VAT (they won't know what IVA.

3.) if they have to pay this, can they reclaim it?

How does it all work?

Thanks

N
From my limited experience in invoicing a U.K. company who were NOT VAT in U.K., I had to register in Spain for IVA and charge the company the 21% IVI and pay this every three months to the Spanish government. In my case the amounts varied. As I am no longer IBI registered here, as I no longer do that job, that’s all I can advise. You will have to register here as autonomo and pay those relevant costs etc

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Old 13th August 2020, 07:34 AM
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I realise that you probably won't bother to tell this to the company in the UK but they cannot have a contractor earning a set fee each month. Hopefully their accountants will jump on them before HRMC does.
Contractors are self-employed and that means there is an element of risk to the contractor, hence they invoice a company for work done and liability for IVA in Spain. If by any chance a contractor is ill or takes a holiday then no invoice is submitted for that period. If a job takes longer to complete than is envisaged or has errors and the agreement has been for x euros, then the contractor has to finish the job without getting additional money so they lose their time.

I trust, for your own sake, that this is very much part time work. I cannot imagine any skilled UK resident contractor agreeing to an end renumeration of 21k per annum for a long term, full time project. (€2000 x 11 months in a working year). By the time they had deducted overheads they would be left with around 17k.

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Old 13th August 2020, 07:35 AM
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My understanding is that general rule for IVA on services is that it is imposed on where they are delivered / used, i.e. in this case UK.

Look at the "B2B" example quoted in this guide:

https://ec.europa.eu/taxation_custom...c/where-tax_en

VAT rules are however based on EU directives so this will possibly all change soon.

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Old 13th August 2020, 07:41 AM
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Originally Posted by Overandout View Post
My understanding is that general rule for IVA on services is that it is imposed on where they are delivered / used, i.e. in this case UK.

Look at the "B2B" example quoted in this guide:

https://ec.europa.eu/taxation_custom...c/where-tax_en

VAT rules are however based on EU directives so this will possibly all change soon.
Could well be correct as mine was based on a company in the U.K. but services actually in Spain

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Old 13th August 2020, 07:51 AM
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My partner has recently registered as autonomo in Spain and is working abroad on a project (in Europe). He submits his invoices WITHOUT IVA/VAT. I assume there is an agreement concerning the income tax between EU countries. As mentioned, not sure how that will affect UK in the future when no longer part of the EU.
One thing he had to make sure was on the invoice was his IVA number and the "IVA" number of the company he was invoicing.

I think, if you're "just a contractor" then you will pay the income tax in the country you're working and will have to claim it back I suppose.

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