Reverse charge mechanism: the invoice without VAT

It means the transaction is subject to VAT, but the seller does not collect it: the buyer declares it. The VAT law, in its article 84, makes the recipient the taxable person in a closed list of scenarios. The supplier issues the invoice for the taxable base, without the quota, and their client self-assesses the VAT they would have paid.

It is not an exemption or a non-subject transaction. It is a change in who pays the tax. That is why the AEAT (the Spanish Tax Agency) summarises it like this: the VAT is declared by the acquirer.

The practical consequence is that the recipient makes 2 entries on the same form 303: the VAT accrued for the transaction and, if they have the right to deduct it, the same amount as input VAT. With full deduction rights the result for the quarter does not change, and that is exactly why so many companies forget to declare it. The obligation to report it still exists even if the result is 0.

The rule only works between businesses and professionals. If the recipient is a private individual, there is no reverse charge mechanism and the invoice includes its normal VAT quota.

The scenarios are strictly defined in article 84.Uno.2º of the VAT law and the practical manual of the AEAT lists them as follows: transactions carried out by businesses not established in the territory where the tax applies (with exceptions such as subject and non-exempt property leases and intermediation in those leases), deliveries of unwrought or semi-manufactured gold of a purity equal to or greater than 325 thousandths, recovery materials (scrap, waste and residues) and the sorting, cutting, fragmenting and pressing services on them, greenhouse gas emission allowances, property deliveries through bankruptcy proceedings, in execution of a guarantee or with waiver of the exemption, execution of land urbanisation works or construction or rehabilitation of buildings between developer, contractor and subcontractors, and deliveries of silver, platinum, palladium, mobile phones, video game consoles, laptops and digital tablets.

The distinction between established and non-established is what generates the most errors. It does not depend on nationality or where the supplier has their bank account: someone is established if they have the headquarters of their economic activity, their tax address or a permanent establishment involved in the transaction within the territory where the tax applies. A foreign supplier with a Spanish NIF (tax identification number) is not automatically an established supplier.

In the last 2 bullet points of letter g (mobiles, consoles, laptops and tablets) there is a threshold. If the recipient is an accredited reseller business, the charge is reversed regardless of the amount. If they are not, it is only reversed when the total amount of those deliveries documented on the same invoice exceeds €10,000, excluding VAT. In the rest of the scenarios there is no threshold: scrap metal, gold, construction work or emission allowances are reversed from €1.

All of the above is VAT, meaning the Peninsula and the Balearic Islands. The Canary Islands are not in the VAT application territory: the IGIC applies there, and its law has its own list of reverse charge scenarios, similar but not identical (it includes, for example, transactions carried out under an administrative or judicial resolution). In Ceuta and Melilla the IPSI applies, with its own regulations. In the Basque Country and Navarre, VAT is not governed by state law, but by their own regional regulations: the regional rules of Álava, Bizkaia and Gipuzkoa and the Navarrese regional law, with the same content as the state law except for payment deadlines and declaration and payment forms, which are approved by each regional tax authority and to which the self-assessment is submitted.

The invoice is issued without a quota and with the literal wording «inversión del sujeto pasivo» (reverse charge mechanism). This is required by the billing regulations, which make it mandatory to include it if the taxable person is the acquirer or the recipient of the transaction. An invoice without VAT and without that phrase is a defective invoice, and the defect belongs to the issuer.

The deadline to issue it, when the recipient is a business or professional, is before the 16th day of the month following the one in which the accrual occurred. That deadline matters: the transaction is declared in the accrual period, not in the invoice date period.

In real estate and construction work scenarios there is also a prior communication. The VAT regulations require the recipient to communicate expressly and reliably, prior to or simultaneously with the acquisition, that they are acting as a business or professional and, in construction works, that the contract is for urbanisation, construction or rehabilitation. Without that communication the supplier has no way of knowing they must invoice without VAT, and the argument always ends up in the supplier's tax inspection.

The status of reseller, for electronic products, is proven with a specific certificate obtained at the electronic headquarters of the AEAT. It is requested by ticking the corresponding box on form 036 (box 513, reseller under article 84.Uno.2º of the VAT law). Managora prepares and submits that form 036 for you; the issuance of the certificate then depends on the AEAT, so it is advisable to start it with enough time before the 1st purchase.

1 detail that saves work: for years now there is no need to issue a self-invoice. The AEAT says it bluntly in its frequently asked questions about the registry books: the recipient records the received invoice in the received invoices registry book, ticks the reverse charge mechanism field, calculates the input quota and fills in the deductible quota field, and does not record any data in the issued invoices registry book.

In boxes 12 and 13. The current instructions for form 303 for 2026 state that they will contain the taxable bases and the quotas accrued in the settlement period due to the reverse charge mechanism (article 84.Uno.2º and 4º of the VAT law) when they originate from transactions other than those reported in boxes 10 and 11.

Boxes 10 and 11 are something else: intra-community acquisitions of goods and services. If you buy goods from a German supplier with a VAT number, or receive a service from a French agency, the transaction goes to boxes 10 and 11, not 12 and 13. If the service is provided by a supplier from a third country, for example a US platform without an establishment in Spain, then it is boxes 12 and 13.

The 2nd entry is the deduction. The same amount you have declared as accrued is taken to the deductible VAT section for input quotas in current domestic transactions (boxes 28 and 29 in the current design of the form), provided you have the right to deduct. If your company is under the pro-rata rule, you will only deduct the corresponding percentage and the difference will be a real cost: that is where the reverse charge mechanism does hurt.

The annual summary, form 390, later collects those same figures, unless you are exempt from submitting it (for example, by keeping the books through the Immediate Supply of Information system).

Only if the transaction is intra-community. Form 349 is an informative declaration of intra-community deliveries and acquisitions of goods, provisions and intra-community acquisitions of services and transfers of goods between Member States. Domestic transactions under article 84.Uno.2º (construction work, scrap metal, gold, real estate, electronics) are not intra-community and are not included in form 349.

Putting the work of a Spanish subcontractor on form 349 is one of the classic mistakes, and it is the one that most quickly catches the attention of the AEAT, because the declared party appears without a valid VAT number in the VIES system.

Form 349 is needed, however, when the service is provided by a company established in another Member State. 2 different rules combine there: the location rule, which places the B2B service in Spain, and the reverse charge mechanism, which makes the Spanish client responsible. For that transaction it is advisable to be registered in the Registry of Intra-Community Operators, which is requested with form 036 and which the AEAT can take weeks to activate. Registration is a formal requirement: not being in the registry does not exempt you from self-assessing the VAT for the received service, but without a valid VAT number in the VIES your supplier will charge you their country's VAT and you will have to ask them for a corrective invoice.

Form 349 is submitted from the 1st to the 20th of the following month when it is monthly, from the 1st to the 20th of the month following the quarter when it is quarterly, and the last period of the year during the first 30 calendar days of January. The frequency becomes monthly when the total amount of deliveries of goods and provisions of services that must be reported in the declaration exceeds €50,000, excluding VAT, in the reference quarter or in any of the 4 previous calendar quarters.

The VAT law has a specific infringement for this: failing to report in the self-assessment for the period the quotas for which the recipient is the taxable person due to the reverse charge mechanism. The planned penalty is 10% of the unreported quotas. The AEAT itself includes this in its note on the incompatibility of penalties, and adds that when this penalty is imposed, those for accounting and registry obligations or billing for the same transactions are not additionally imposed.

That 10% is no longer automatic. The Supreme Court, in 2 rulings on 25 and 26 July 2023 (cassation appeals 5234/2021 and 8620/2021), declared that applying that fixed fine when the transaction has not caused economic harm, because the recipient had the right to fully deduct the same quota, violates the principle of proportionality of European Union Law, and that the judicial body can annul the penalty by not applying the rule. The Tax Agency itself published an analysis on that doctrine. In practice: if the result was 0 and you had full deduction, there are solid arguments to dispute the penalty, although the Administration can impose it and it may have to be appealed.

What does not disappear is the obligation to declare. The transaction must appear on form 303 even if it results in 0, and when there is a pro-rata rule or limitation on the right to deduct, economic harm does exist and the penalty is upheld normally.

If you detect the oversight yourself before the AEAT requires you to, the way forward is to submit a complementary or corrective self-assessment. The surcharge for submitting late without prior requirement is 1% plus an additional 1% for each full month of delay. After 12 months, the surcharge is 15%, late payment interest is demanded from that moment and penalties are excluded. The surcharge is reduced by 25% if paid on time.

If the problem is the received invoice (without VAT and without the wording, or with VAT when it should have been without it), do not let it slide. Ask your supplier for a corrective invoice. If you accept and deduct a VAT that the supplier should never have charged, the AEAT can deny you that deduction, and you will have already paid the amount to the supplier.

Managora reviews the received invoices before settling the quarter, detects those that carry the wording and those that should carry it, and submits the corresponding form 303 and form 349.

The underlying rule does not change: article 84.Uno.2º remains the same and the €10,000 threshold for electronic products remains the same since 2015. What changes is the packaging, meaning how the invoice is issued and sent.

Real Decreto 238/2026, of 25 March, published in the BOE on 31 March 2026 and in force since 20 April 2026, develops the mandatory electronic invoicing system between businesses and professionals. The obligations to issue electronic invoices will apply after 12 months for those exceeding €8 million in transaction volume and after 24 months for the rest, counted from the entry into force of the ministerial order developing the public invoicing solution of the AEAT. As long as that order is not published, there is no set date.

The same royal decree introduces the obligation to report the status of the invoice: commercial acceptance or rejection and full effective payment, with its date, within a maximum period of 4 calendar days excluding Saturdays, Sundays and public holidays.

In parallel, the VERI*FACTU deadlines were extended: according to the informative note from the AEAT of 26 March 2026, Corporate Tax taxpayers must have their computerised billing systems adapted before 1 January 2027 and the rest of the obligated parties before 1 July 2027.

For an invoice with the reverse charge mechanism this translates into 1 very specific thing: the mandatory wording will have to travel in a structured field of the electronic format, and the billing software will have to know how to issue without a quota. It is advisable to check this with your software before the obligation reaches you, not after.

Managora reviews your received invoices, identifies those that must go without a quota, calculates the self-assessment and submits form 303 and, when appropriate, form 349. If you also need registration in the Registry of Intra-Community Operators or the reseller certificate, we process it with form 036. You can see the updated amount on the file for each procedure and get it done today.