Spanish anti VAT fraud measure

Thu 5th Feb 2015

Spain has introduced a range of measures to help reduce VAT fraud. These will come into effect from 1 March 2015. The include:

Sellers of goods subject to the use of the domestic reverse charge for anti-fraud purposes will now be required to demonstrate to their customers that they are official sanctioned to not charge Spanish VAT. The sellers must inform the Spanish tax office ahead of the commencement of any relevant trade, and seek approval to use nil VAT on local sales. This can be done via the regular Form 036 that all taxable enterprises are required to complete in the months prior to following financial year. The tax office will then grant the status of official reseller of the relevant goods, and issue it with a certificate to be produced for customers.

The above rule relates to the sale of PCs, tablets, computer chips, games consols, carbon trading licences and wholesale electricity supplies.

The use of the domestic reverse charge is provided by the 2013 EU Quick Response Mechanism for VAT fraud. This involves criminals declaring they have sold goods across EU borders at zero VAT (as an intra-community supply), but actually selling them within a country with full VAT. They then illegally hold the VAT back.