Spanish VAT for Online Sellers Outside Spain: OSS, the €10,000 Threshold and the Spanish VAT Number

If you sell online to customers in the European Union, VAT (Value Added Tax, known in Spain as IVA) is probably the tax that will give you the most headaches. It is a consumption tax: the end customer pays it, but the seller collects it and remits it to the tax authorities. In Spain, that authority is the AEAT (Agencia Estatal de Administración Tributaria, the Spanish Tax Agency). This guide explains from scratch how VAT works for non-Spanish online sellers, what the OSS one-stop shop is, how the €10,000 threshold operates and when you need a Spanish VAT number.

The basic rule: VAT follows the customer

Since the EU’s e-commerce VAT reforms, sales of goods and certain digital services to private consumers (B2C) are, in general, taxed in the country where the customer lives rather than where the seller is established. If you sell a product to a customer in Spain, Spanish VAT applies: the standard rate is 21%, with reduced rates of 10% and 4% for certain goods and services. A customer in France or Germany means French or German VAT, each with its own rates.

The €10,000 threshold and the One Stop Shop (OSS)

There is a simplification for small businesses. If your company is established in a single EU country and your cross-border B2C sales of goods and of digital or telecommunications services to other EU countries do not exceed €10,000 per year across the whole EU combined, you can apply the VAT of your own country. Note that this is a combined amount, not €10,000 per country. Once you exceed it, you must apply the VAT of each customer’s country from that point onward. The calculation also takes the previous year into account, so it is worth checking both.

Two important clarifications for non-Spanish sellers:

• The threshold is designed for businesses established in a single EU Member State. Businesses established outside the EU generally cannot use it.
• Sales to consumers in your own country of establishment do not count; only sales to customers in other EU countries are added up.

If you exceed the threshold (or voluntarily opt out of it), you do not need to register in every country. You can sign up for the Union OSS (One Stop Shop) in a single Member State and declare and pay the VAT due in all the others through one quarterly return. In Spain, it is filed electronically with the AEAT using form 369, in the month following the end of each quarter, and paid in euros in a single payment. The tax authority then distributes the money among the relevant countries.

There are related schemes: the Import OSS (IOSS), for low-value consignments (up to €150) shipped from outside the EU, and the non-Union OSS, for non-EU businesses supplying services to EU consumers.

When do you need a Spanish VAT number?

In Spain, the number that identifies you for tax purposes is the NIF (Número de Identificación Fiscal); for foreign individuals it is usually the NIE (Número de Identidad de Extranjero). In international trade it appears with the “ES” prefix and works as your Spanish VAT number. The OSS does not replace it in every case. You normally need a Spanish VAT registration when:

• You store goods in Spain. If your stock is held in a Spanish warehouse, for example at an Amazon fulfilment centre, sales to Spanish customers are domestic transactions and are reported on the standard form 303, not through the OSS.
• You move your own stock to Spain from another EU country. This is treated as an intra-Community transfer and generally requires registration in the destination country.
• You are established in Spain (as a company, permanent establishment or self-employed person). You then file your VAT returns and, if you sell to the rest of the EU, use the Spanish OSS.
• You buy from EU suppliers or sell to businesses (B2B) and must report those transactions. In addition, non-EU businesses may need to appoint a fiscal representative in Spain, depending on their country of origin.

The OSS only covers certain distance sales and services to consumers. Sales to businesses, domestic transactions and stock held in another country are, in general, subject to different rules.

At Zythos Business we help freelancers and SMEs, including international entrepreneurs, work out which VAT regime fits their actual sales flow, handle registrations with the AEAT and keep their quarterly returns up to date. If you are unsure whether you have exceeded a threshold, or whether your stock requires you to register in Spain, we can review your case before it becomes a problem.