Among the taxes in Spain, value-added tax (VAT) is one of the most significant, applying to most goods and services. VAT is an indirect tax because customers pay it to the business on each sale, and then the business forwards the collected amount to the Agencia Tributaria (AEAT—the Spanish Tax Agency).

Though it can vary by situation, VAT is typically paid to the state every quarter. Let’s explore how the quarterly VAT declaration works, who has to file it, and the steps for submitting the necessary documentation.

What’s in this article?

• What is the quarterly VAT return?
  
• Who has to file the quarterly VAT return?
  
• What happens if the quarterly VAT return is not filed?
  
• What tax forms affect the quarterly VAT return?
  
• How is the quarterly VAT return filed?
  

What is the quarterly VAT return?

The quarterly VAT return involves paying value-added tax every three months by submitting Form 303.

In a transaction, the customer pays the tax percentage, which varies based on the VAT rates in Spain, and the business is the taxable entity, meaning it collects the tax.

The VAT paid on purchases of goods or services required for operating the business (input VAT) needs to be subtracted from the VAT collected on sales (output VAT). The difference is reported by filing Form 303 every quarter.

Though this article focuses on the quarterly VAT return, which is most common for businesses, some pay VAT monthly. To do this, they must meet specific conditions to register in the monthly refund register, or REDEME (in Spanish “registro de devolución mensual”).

Who has to file the quarterly VAT return?

Anyone involved in a professional activity that is subject to value-added tax, such as self-employed individuals, business owners, trading companies, real estate developers, and landlords, must file a quarterly VAT return.

Even if during a quarter you have not carried out any type of professional activity that involves generating invoices, you are still obliged to file a quarterly VAT return. For example, if you have a seasonal business that is only open during the summer months (e.g. May to September), you will have to file your first quarter VAT return for information purposes to let the AEAT know that no invoicing has taken place.

If your activity is exempt from VAT, such as teaching or a medical practice, you don’t need to file a quarterly VAT return.

What happens if you do not file a quarterly VAT return?

As we have just seen, if you are registered as a VAT collector, you must file a quarterly VAT return even if you have had no activity during the tax period (unless your activity is exempt from VAT, as we have just seen). These are the deadlines you must respect:

• First, second and third quarter: Between April 1 and 20, July and October respectively.
  
• Fourth quarter: Between January 1 and 30.
  

In the event of failure to file the quarterly VAT return on time, the AEAT imposes a surcharge or penalty which, as indicated in the General Tax Law, varies depending on the result of the VAT return.

Positive result with an amount to be paid

If the quarterly VAT return that you did not file showed a positive result that obliged you to pay an amount of money to the AEAT, a surcharge must be assumed on the amount of VAT pending payment. The percentage of the surcharge varies depending on how much time has passed from the deadline to the filing date:

• During the first 3 months after the deadline: 5 %.
  
• Between 3 and 6 months after the deadline: 10%.
  
• Between 6 and 12 months after the deadline: 15%.
  
• More than 1 year after the deadline: 20% and 4.0625% interest for late payment (this is the percentage fixed in 2024, but could change in the coming years).
  

In some cases there is not only a failure to comply with the deadline, but the Tax Agency has had to notify the delay with a payment request. In these cases, the AEAT will apply a penalty whose amount will depend on the seriousness of the facts. These are the categories:

• Penalty of 50 %: Minor infractions, such as, for example, an involuntary error that does not economically harm the AEAT.
  
• Penalty of 100 %: Serious infringements, such as, for example, having indicated amounts lower than the real ones, regardless of whether the error is voluntary or involuntary.
  
• Penalty of 150 %: Very serious infringements, such as, for example, deliberately concealing tax information to hinder the AEAT's inspection tasks.
  

Negative result with an amount to be returned

When the return generates a negative result, it is the AEAT who has to compensate you, either by subtracting that amount from the amount you have to pay in future returns or by processing the VAT refund. In this case, the penalty is 200 €, although the following reductions may be applied:

• 25 %: The penalty is 150 € if you pay it voluntarily and without allegations.
  
• 50 %: The penalty is 100 € if you do not file the quarterly VAT return on time and the Tax Agency has not processed the corresponding requirement.
  

What tax forms affect the quarterly VAT return?

Form 303 is not the only form that affects quarterly VAT filing. Below is a summary of the key tax forms associated with the quarterly VAT return:

• Form 303: This tax form is designed to allow for the quarterly settlement of VAT after it has been collected, requiring the payment of the due amount to the AEAT. This process is required no matter if the return shows a positive (payment owed), negative (refund owed), or zero result (no payment owed).
  
• Form 390: This form provides an annual summary to the Treasury, detailing the VAT you have collected and the VAT you pay after applying the appropriate deductions. It is completed to supplement Form 303, incorporating the results from the quarterly VAT returns.
  
• Form 369: This tax form is for small businesses or self-employed individuals who offer electronic services or digital products to customers in Europe. This VAT form is submitted quarterly using the VAT One Stop Shop (VAT OSS).
  
• Form 349: This return is used to settle VAT on intra-community transactions, and though it is typically filed quarterly, it can also be processed annually or monthly. If your business frequently deals with customers in the European Union (EU), using a tool such as Stripe Tax can simplify your tax responsibilities by automatically verifying whether a customer has a valid European VAT number and determining whether to apply the appropriate VAT to each transaction. You can view the complete list of over 50 countries where Stripe Tax enables automatic tax calculation and collection on your sales as well as the list of excluded territories.
  

How is the quarterly VAT return filed?

Although there are several tax forms that affect the quarterly VAT return, form 303 is the main document and the one filled out by the vast majority of companies in Spain. As it is a fairly extensive form, we recommend that you consult our guide to form 303 to make it easier for you to understand what information you should include in each of its boxes.

We hope you find the information in this article and the specific guide to form 303 useful for filing your next quarterly VAT return in Spain. Note that Stripe’s Revenue products can help you simplify your financial processes, speed up the filing of returns such as the one we’ve just described, and reduce manual errors. Still, if you have any questions about how the nuances of any of the boxes on Form 303 might affect your business, check with your tax advisor.