The monthly foreign trade report from the Ministry of Economy, Trade, and Enterprise shows a 2.5% increase in exports from Spain in October 2024. The data also includes shipments to other EU countries, a type of intra-community transaction that represents 62.3% of total exports, which reached nearly €27 billion that same month.

The significant growth in this type of transaction is clear when you consider that five years ago, Spain’s exports were around €18.8 billion, according to the 2019 report. More and more cross-border businesses are taking advantage of the globalised market, but to do so, they need to be aware of the tax obligations associated with selling products to countries outside the EU.

In this article, we provide the details of value-added tax (VAT) on exports from Spain.

What’s in this article?

• What are exports from Spain?
  
• Are exports from Spain subject to VAT?
  
• What are the VAT obligations for exports from Spain?
  
• Frequently asked questions about VAT on exports from Spain
  

What are exports from Spain?

An export from Spain refers to a sale made to a business or individual located outside the EU. While the term “export” is often used informally for sales within the EU, such transactions are technically classified as “intracommunity supplies.” Here are the differences between the two types of transactions:

Are exports from Spain subject to VAT?

Exports are exempt from VAT, regardless of whether the customer is a business or an individual. This is a total exemption, which means the exporter does not charge VAT on the products (i.e. no output VAT) but can deduct input VAT on goods and services used to facilitate the exports.

Although these transactions are exempt from VAT, they must be reported on Form 303 to inform the Spanish Tax Agency (Agencia Tributaria, or AEAT) of the extracommunity transactions carried out during the tax year.

What are the requirements for VAT exemption on exports from Spain?

Exports from Spain are exempt from VAT as long as they meet the following criteria:

• The product or service is sold from Spain.

• The exporting business must have the necessary documentation – such as invoices and relevant records – to prove and justify that these transactions are exports.

• The goods are transported to a location outside the EU or to “third territories” of the EU, which are also referred to as areas outside the TAI.

Third territories operate under different tax regulations than the rest of the EU, and cross-border sales to these destinations are classified as exports rather than intracommunity supplies. The following are third territories:

• Ceuta

• Melilla

• Canary Islands

• Mount Athos (Greece)

• French overseas territories

• Italian waters of Lake Lugano

• Campione d’Italia

• Livigno (Italy)

• Büsingen am Hochrhein (Germany)

• Heligoland (Germany)

• Åland (Finland)

What are the VAT obligations for exports from Spain?

While exports from Spain are exempt from VAT, they have other related requirements:

Filing tax forms for information purposes

Although no VAT is collected for payment to the AEAT, it is necessary to provide all relevant data regarding the exports made. For this purpose, the following forms must be submitted:

• Form 303: Quarterly VAT return

• Form 390: Annual VAT return

In both cases, the value of exempt exports must be recorded in the register of issued invoices. To streamline the reporting process for these transactions, using a tax automation tool such as Stripe Tax can be extremely beneficial. In addition to automatically calculating and collecting VAT on your sales while applying the appropriate exemptions, Tax allows you to generate detailed reports on the taxes collected. Tax is regularly updated to reflect the latest changes in tax regulations, ensuring you apply the correct tax amounts in the more than 50 countries where it’s available (exceptions can be reviewed here).

Issuing invoices

In addition to the standard information required on any invoice, you must include some additional information when issuing an invoice for export to another country:

• Harmonised System (HS) code: The invoice should include the international trade code, which specifies the terms of the agreement. This includes who assumes the risks and when or how costs are divided based on international commercial terms (Incoterms).

• Origin of goods: The invoice must clearly state that the goods are being shipped from Spain to a non-EU country.

• Transaction currency: Payment is sometimes made in euros (EUR or €), but depending on the country of destination, other currencies can be used, such as US dollars.

• Unit and total prices: The invoice should show the amount for each product or service and the total value of the goods.

• Payment terms: The invoice must include details of the payment method and the deadline for the customer to pay the amount after receiving the goods.

• Freight value: This includes the cost of transporting the goods and the method of transportation used.

• Insurance value: If liability insurance is purchased for the delivery of the goods, its cost should be included on the invoice.

Frequently asked questions about VAT on exports from Spain

If VAT is exempt, is there no tax to be paid on exports from Spain?

Although exports from Spain are exempt from VAT, in some cases, the importer can be required to pay duties. The obligation to pay depends on the country of origin (in this case, Spain), the country of destination (the importer’s country), and the type of products or services being exported.

Is it necessary to declare exports from Spain even if they are exempt from VAT?

Yes, for informational purposes. This requires the completion of tax documents such as Form 303 and Form 390. Professionals exporting from Spain under the Immediate Supply of Information (SII) system must submit the register books of invoices issued through this system.

Does exempt VAT on exports from Spain have to be reported on form 349?

No. Form 349 is used to report monthly or quarterly on intracommunity transactions, but exports from Spain are considered extracommunity transactions.