The EU market is one of the core markets for cross-border e-commerce, and the large number of potential customers and year-on-year growth in sales at the European station have made numerous cross-border e-commerce sellers active in the market.
But while there is a huge attraction to selling furniture, EU countries are paying more and more attention to tax issues and the EU tax reform is moving towards compliance.
Today, we are going to share with you the contents of the Spanish tax code, sellers who have been stationed in Spain or are planning to station in Spain can read it carefully.
Highlights
NEWS
EU Tax Code
Specific Definitions and Uses
EU Tax Code NIF Comunitario: According to the agreement of the EU member states, all transactions within the EU must have an EU tax code.
If a seller wants to sell goods at a Spanish site, he/she must first apply for a local tax code, NIF, from the Spanish tax authorities through a tax agent, which will be used as a basis for subsequent customs clearance and tax filing.
Before applying for a Spanish tax ID, persons outside Spain need to apply for a personal number and Hague certification, and need to have a local tax agent.
In order to conduct B2B tax-free transactions within the European Union, sellers must apply for a Spanish EU tax code. The Spanish EU tax code (ES VAT) is known as Registro de Operadores Intracomunitarios, or ROI for short.
ROI is mainly used for automatic invoicing by sellers on the EU's B2B tax-free trading platform. After the number is applied for, companies do not need to pay VAT to the tax authorities for any cross-border B2B transactions conducted within the EU.
EU B2B Trading
What are the conditions that should be fulfilled in the application?
B2B is the abbreviation of Business-to-Business, which means that both the supply and demand sides of e-commerce transactions are businesses, and a B2B order is an order to sell to a business.
In order to avoid tax evasion, the EU tax authorities require sellers who have generated a B2B order using their own VAT to declare the B2B order and submit specific information on EU cross-border tax-free sales to the local tax authorities.
At present, many cross-border e-commerce sellers selling in the EU have only made B2C VAT declarations. According to the relevant EU regulations, tax declarations are far more than just B2C VAT declarations, but also include B2B declarations.
EU B2B transactions, on the other hand, mean that the consumer or supplier dealing with the seller should fulfill the following two conditions:
1. Taxpayers in EU countries other than Spain;
2. Must have a VIES certified EU tax code.
Since the EU tax reform, the Spanish Tax Administration will conduct a random check of cross-border B2B transactions for sellers who already have an EU tax code, and sellers will be required to report the sale of this part of the B2B (ES TO EU) and provide a report of the transactions between the EU.
Many sellers are confused by the fact that the Spanish EU tax code has led to an investigation by the Inland Revenue Department.
The main point is that in Spain there are two tax codes, one for local taxes and one for EU taxes.
Local tax codes start with N and are used for customs clearance, transactions, filing and tax payment;
The Spanish EU tax code is used for invoicing purposes only when cross-border B2B transactions take place in the EU. Spain scrutinizes the trading activities of companies with that country's VAT number within the EU under the EU VAT rules.
When filing for Spain, the local tax code is filed on Form 303, while the EU tax code is filed on Form 349, and a separate invoice form is required for filing EU B2B.
Note that although the Spanish tax code is filed at the same time as the EU tax code, it is filed separately and independently.
According to Spain's VAT regulations, if a seller does not report an EU cross-border transaction within one year, the tax office revokes the seller's EU tax code, and once the EU tax code has been revoked by the tax office, the seller will not be able to apply for it again.
According to the green circle to understand, most of the application for the EU tax code sellers, and did not really use the EU tax code, the Inland Revenue Department in order to prevent sellers from abusing the EU tax code, the temporary rejection of the previous application for the EU tax code.
However, the IRS has clearly stated that the absence of an EU tax code does not affect EU transactions, and sellers can carry out normal EU transactions and apply for an EU tax code after filing a 349-ECL return.
Once again, if you already have an EU tax code, you must file a 349 return to avoid cancellation of your EU tax code if you want to keep your ES tax code valid for a long period of time.
Finally, for companies outside of Spain, sellers on the Amazon platform are currently required to apply for a Spanish EU tax code after the local tax code has been issued and bonded.
In the process of applying for a Spanish EU tax code, if you are randomly inspected by the tax office, in most cases you will be asked to provide documents proving that you have cross-border B2B transactions in the EU, or moreover explaining that the seller needs to register for an EU tax code.
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