EU invoices, ROI checks, and model 349
Marisa's gestor filed everything correctly. Every quarter, on time. Until one client restructured, a VAT number changed, and suddenly, there was a requerimiento waiting in her inbox.
Marisa (not her real name) is a Belgian UX designer living in a small village close to Girona. Right before the pandemic, she bought this amazing cottage - and as a non-designer myself, I am in awe about the transformation. Turns out, you can pull off cozy and modern at the same time.
Obviously, Marisa works from her living room. She does UX design for two SaaS companies in the Netherlands, while also working on short-term projects with companies that need intermittent support for their design teams. In practical terms that means she doesn’t have to worry about VAT (or IVA, in Spanish), because B2B services within the EU do not require VAT on the invoice.
Her invoices, by default, include the relevant phrase
“VAT-free transaction pursuant to Article 69 of Law 37/1992 on VAT” - “Operación exenta de IVA por aplicación del artículo 69 de la Ley 37/1992 del IVA”
Every trimester, she files her 303 to declare the (non-existing) VAT, and that’s that.
Or is it?
ROI isn’t just Return on Investment
If you are a freelancer in Spain working with European clients, the Spanish understanding of ROI is crucial. ROI means: Registro de Operadores Intracomunitarios, and you need to be registered there. On the other side, your clients need to be in the corresponding register in their own country.
Sometimes this is referred to as EU-VAT number, and you can check the validity of your client’s numbers in the European VIES database. And yes, you can check whether you are correctly in the database. Choose Spain as the member state and plug in your NIE/NIF number. Then click verify, and you’ll get the result.
That also means that your EU-VAT number is simply ES-{your NIE/NIF number}.
If you do have European invoices, you also need to file the modelo 349 every quarter. Unless you are billing over 50,000 EUR every quarter, then you’ll need to do monthly filings.
The 349, the intracomunitario declaration, needs to match, to the cent, what you declared in your 303 - for EU VAT registered entities. Because if they are NOT EU VAT registered (e.g. because they forgot, or they are a charity, or a host of other reasons) - then you’d have to charge Spanish VAT whether you want it or not.
Typical problems with modelo 349
Marisa’s previous gestor did file the 349 every quarter, however, they never re-checked the VAT registration of her long-term clients. And when one of Marisa’s clients went through a company restructure and changed their VAT registration - that information was lost. As a result, the 349 reference number didn’t exist anymore.
Oops.
Luckily, this isn’t considered fraud and rarely carries a fine. At some point, Marisa got a requerimiento to amend the filings and explain what had happened. She ended up with some extra paperwork, and a scare.
Another typical drift happening over time is connected to your (initial) choice of epígrafe del Impuesto sobre Actividades Economicas (the IAE that defines your professional category for tax purposes). Most autónomas choose their category at the beginning of their activity. And then they learn, and pivot, and adjust. And sometimes what you do ceases to match what you signed up for. For example, if Marisa were to start licensing Figma designs, we would review her setup.
And, as mentioned above, if you bill more than €50k per quarter, your 349 needs to be filed monthly.
Check your filings - at least occasionally
The first thing we do with every new client at AutonomaThatWorks is a reconciliation check. Four quarters of 303s against four quarters of 349s, cross-referenced against the VAT numbers on record. In about six out of ten cases, we find something that needs updating: a VAT number that needs updating, a service that has been classified slightly too loosely. Twice it’s been something that would have triggered a requerimiento within the year.
So, even if each filing has been handled correctly in isolation, you do want to check them side by side to get the full picture. So, when was the last time you, or your gestoría, looked at the full story to make sure it makes sense?
