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VAT reporting for goods imported into Spain

Goods introduced in Spain from non-EU countries are subject to VAT on the import, together with import duties. If the importer is a taxable person, and to the extent that these goods are going to be used in a business or professional activity, the importer can deduct the VAT paid.

This deduction is made effective by submitting the corresponding VAT return (monthly or quarterly). This implies that the importers assume a financial cost, for the time that elapses since the goods are cleared at the customs and the date of submission of the VAT return. Moreover, if there is not enough output VAT, then the receivable VAT must be carried forward to future periods, thus lengthening the recovery of VAT paid on the imports.

As of 2015, importing companies can mitigate this financial cost by a new scheme that modifies the treatment of import VAT. This system enables companies to opt ​​ to include the VAT paid on their imports in their VAT returns, without having to pay when the tax before the Customs office at the clearance of the goods. The VAT due on the import will continue to be assessed by the Customs Office, but it will not have to be paid at this step, but later, when the transactions is included in the monthly or quarterly VAT return.

If the importer has full right to the deduction of input VAT, imports will not trigger any actual payment, since they are at the same time VAT payable and receivable, offsetting each other, like the settlement of intra-community acquisitions.

To know more please visit the section  about the deferred payment system for the VAT on imports on the Spanish Tax Office site

However, to opt for this scheme, the importer is required to file monthly VAT returns and submit to the Tax Office their invoices issued and received in the following four days from their reception or issuance.  This implies a huge administrative load of work for small and medium size business, which makes the option for the new VAT import system a real challenge.

In conclusion, business importing goods in Spain may find a new way to avoid paying VAT on imports into Spain at the Customs. This  will allow them avoiding the current time gap between the payment and the deduction or refund of such VAT. However this new system comes at a cost, which is the relevant administrative load of work required by the new system.

To know what VAT services we provide to business please visit  our VAT services page. We will be more than willing to assist you in this matter.