Invalid VAT number of Foreign company

Invalid VAT number  
of Foreign company  

Question:

Hi, Our company has a contract for transport services with a Spanish company. In the VAT system verification, the Spanish company number is invalid. The Spanish company is taxable, but the VAT number is not included. My question is whether the shipping services of this company can be invoiced, even though the number is not valid, and the reason for non-charging VAT is Art. 86, para 3, art. 21, para 2 and art. ? Also, do not include it in the VIES declaration. Are these actions correct in order not to charge VAT? Thanks in advance.

Answer:

Hello!

You should keep in mind that in several countries (including Spain) companies have two VAT numbers - one for their business only in Spain and one for transactions outside Spain. You may have given your Spanish number or did not sign up for such deals in the EU and therefore it is invalid. Ask your counterparties for another VOT number. Unless they are registered for VAT in Spain Art. 86, paragraph 3 says that you do not charge VAT if the venue is outside the country. Art. 21 and Art. 22 determine where the place of delivery of the transport service is. If you provide a service to a taxable person, the place is where the recipient of the service - the Spanish company - is registered. If you provide a service to a non-taxable person, the place of performance is where the supplier has established his economic activity - that is, Bulgaria if your company is registered in Bulgaria. In this case Art. 86 para. 3 is not applicable. Art. 3 clearly determines who is a taxable person - in your case, your Spanish partner is a taxable person and the place of delivery of the transport service is Spain. Even if he is not registered for VAT in Spain, he will have to register for VAT on such a supply of services and to self-assess VAT (reciprocally to the Bulgarian VAT Act - Article 97a, paragraph 1)

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