It is becoming increasingly common to carry out operations beyond the borders of the country where one is established. Specifically, we are going to refer to operations within the European Union, and its VAT exoneration, carried out between companies and / or self-employed (not with final consumers because then VAT would have to be added on the invoice. And, from the new regulations on electronic commerce that enters into force on July 1, 2021, if € 10,000 is exceeded there must be taxed at destination and set up additional registrations)
By activating the NIF-IVA (VAT Number), the supplier of goods or service provider will not have to add VAT on the invoice. In turn, the customer will not have to pay VAT on that invoice (although the TVA must be «self-settled»). It is what is known as «Reverse Charge«: the recipient makes the declaration of both input VAT and output VAT. In this way, the effect continues to be neutral and this simplifies VAT treatment between countries.
NIF-IVA (VAT Number) of both parties must be included on the invoice. The issuer of the invoice must verify that its customer has the NIF-IVA active. The latter can be done from the Tax Agency’s own E-Office (Sede Electrónica de la AEAT), and this validation of the VAT number can also be done from the European Commission’s website. Another fundamental aspect to review is where the services are understood to be provided.
The activation of the NIF-IVA and registration in the VIES (VAT Information Exchange System) also known as the ROI, which stands for “register of intra-Community operators”, is extremely simple: it is carried out through boxes 582 and 584 of form 036/037. However, it is a procedure that generates a lot of uncertainty at first, since it requires some understanding to control all the aspects involved in it, and there is the possibility that the Tax Agency will visit you in person or request more information about it.
The administration has up to 3 months to resolve the request, being considered rejected if there is administrative silence. However, normally in a matter of a few days it can be verified that the registration has been correct (although the administration does not notify it until weeks later). Moreover, the registration and activation of the NIF-IVA takes effects with the date indicated in the application.
On the other hand, carrying out intra-Community transactions means for you that you will have to submit quarterly form 349 informing of the volume of transactions with each specific customer/supplier within the EU.