2026 EN

The compliance countdown has become operational.

Spanish companies subject to Corporate Income Tax must have compliant invoicing systems in place before 1 January 2027. For self-employed individuals and the other taxpayers covered by the rules, the deadline is 1 July 2027. With less than three months remaining for companies, VERI*FACTU is no longer a future tax reform: it is a systems, controls and business-continuity project.

The rules stem from Royal Decree 1007/2023, as subsequently amended, and are designed to ensure the integrity, preservation, accessibility, legibility, traceability and unalterability of invoicing records. The Spanish Tax Agency updated its detailed FAQs on 21 July 2026, providing useful guidance on scope, implementation and legacy software.

Who is affected — and who is not?

The regime generally covers businesses using computerised invoicing systems that are subject to Spanish Corporate Income Tax, individuals carrying on economic activities under Personal Income Tax, and non-residents operating through a Spanish permanent establishment. It applies in the Spanish common tax territory.

An important exclusion concerns taxpayers whose invoicing records are reported through the Immediate Supply of Information system (SII). Companies already within the SII do not have to adapt those invoicing processes to the Royal Decree 1007/2023 requirements. Groups should nevertheless confirm the position entity by entity: one Spanish subsidiary may be in the SII while another is not.

Transactions for which there is no legal obligation to issue an invoice are also outside the relevant invoicing-system requirements. However, this should not be confused with a general exemption for small businesses or low invoice volumes.

VERI*FACTU is a choice of mode

The terminology creates a common misunderstanding. The regulation governs compliant Computerised Invoicing Systems, or SIFs. VERI*FACTU is one of the two permitted operating modes; it is not the only way to comply.

A VERI*FACTU system sends a structured invoicing record to the Tax Agency automatically, securely and continuously when an invoice is issued. The customer can use the invoice’s QR code to check the record.

A non-verifiable compliant system does not send each record immediately. Instead, it must preserve the records and provide stronger internal safeguards, including electronic signatures and an event log, to guarantee integrity and traceability. Both modes require adapted software, chained records and the prescribed QR information on invoices. The operational choice should therefore be based on connectivity, data governance, storage, control and audit requirements — not merely on a desire to avoid sending data.

Manual invoicing requires careful analysis

The regulation targets systems that receive invoicing information, preserve it and process it to generate invoices or other derived outputs. Businesses that invoice exclusively by genuinely manual means, without the assistance of a SIF, may fall outside the system rules.

The label placed on a tool is not decisive. A Word or spreadsheet file used only as a basic manual template may be different from a workbook that stores invoice data, performs calculations, produces sequences, generates accounting information or feeds another application. Functionality and integration determine the answer. Businesses should document their analysis rather than assume that “Excel” automatically means exemption.

Likewise, outsourcing invoice preparation does not transfer the tax responsibility. Where a customer, adviser, platform or third party materially issues invoices, the business carrying out the underlying transactions remains responsible for compliance.

Legacy software is a significant risk

The Tax Agency’s FAQs contain a particularly important warning. After the applicable 2027 deadline, retaining a non-compliant invoicing system that is still capable of issuing invoices may itself constitute an infringement, even if the company says it no longer uses the program.

Historical data may be retained for consultation, but the old application should be uninstalled, disabled or technically prevented from creating new invoices. This point must form part of the migration plan. Simply moving daily invoicing to a new platform while leaving the old system operational on a server is not sufficient risk control.

Article 201 bis of the General Tax Law provides for a fixed penalty of €50,000 per financial year for holding systems that should be certified but are not, or where certified devices have been altered. The exposure makes documented decommissioning as important as installing the replacement.

Five actions before January

Spanish companies should complete five workstreams now:

• Map every invoicing channel: ERP, point-of-sale terminals, e-commerce platforms, mobile applications, spreadsheets, marketplace tools and self-billing arrangements.
• Confirm the scope for each legal entity, including SII status and any permanent establishments.
• Obtain the supplier’s responsible declaration identifying the compliant software version and whether it operates in VERI*FACTU, non-verifiable or dual mode.
• Test invoice series, corrections, cancellations, QR codes, offline scenarios and the connection between billing, accounting and tax reporting.
• Plan the cutover and disable legacy invoice-issuing functionality while preserving accessible historical records.

International groups face an additional issue. A global ERP may be compliant in commercial terms but still lack the Spanish record format, chained hash, QR code, event log or transmission functions. Local tax and technology teams should test the Spanish configuration, rather than rely on a group-wide assurance.

Conclusion

VERI*FACTU is not simply a new invoice layout. It changes how invoice data is created, linked, protected, transmitted or retained. The companies best prepared for 1 January 2027 will be those that assign ownership across tax, finance, IT and operations, document their scope decisions and test the full invoice lifecycle before year-end.

October brings one of the recurring Corporate Income Tax deadlines for many Spanish companies: the second instalment payment of the year, filed through Modelo 202.

Although this is a payment on account rather than the final annual Corporate Income Tax return, it should not be regarded as a mere administrative formality. The amount paid will subsequently be deducted from the final tax liability, so reviewing the calculation carefully can help identify potential discrepancies in advance and avoid unnecessary pressure on cash flow.

Who may be required to file it?

The filing obligation depends on the circumstances of each company and on the calculation method applicable in each case. For example, entities whose net turnover exceeded €6 million during the relevant previous twelve-month period must calculate their instalment payments using the method based on the taxable base generated during the current financial year, in accordance with Article 40.3 of the Spanish Corporate Income Tax Law, and must file Form 202 even where no amount is payable.

For other companies, both the applicable calculation method and the filing obligation should be reviewed on a case-by-case basis.

Why should companies review the October payment carefully?

By October, businesses already have several months of current-year accounting information available. This makes the second instalment a useful point at which to compare the company’s actual performance with the assumptions made earlier in the year.

Among other matters, companies should review:

• the accumulated accounting result and the main tax adjustments;
• changes in turnover or profitability;
• tax-deductible and non-deductible expenses;
• tax losses carried forward or tax credits that may be applicable;
• instalment payments already made in April;
• any extraordinary transactions carried out during the financial year; and
• the cash available before arranging the payment.

When is Form 202 filed?

For companies whose tax year follows the calendar year, the October instalment corresponds to period 2P. The general filing period is during the first twenty calendar days of October. Where payment is made by direct debit, the deadline is generally earlier.

Although it is an advance payment towards the Corporate Income Tax ultimately payable, an inaccurate estimate can have a direct impact on a company’s liquidity.

The October review can therefore also serve as an initial indication of the tax position with which the company may close the financial year.

At MDG Advisors, we recommend reviewing the company’s accounting records and tax position before each instalment payment, rather than treating Form 202 as an isolated compliance obligation.

In September 2026, the European Commission published figures showing that, since the e-commerce VAT package came into force on 1 July 2021, more than €125,000 million has been declared via the One-Stop Shop (OSS) and the Import One-Stop Shop (IOSS).

The figures confirm that the system is now standard practice and must be managed as an essential tax process, not merely as an administrative shortcut.

What the latest data reveals

Tax authorities receive a comprehensive set of structured data that they can cross-check against information from payment providers, platform declarations, customs data and national self-assessments.

The figures show that simplified compliance has become the standard option for many cross-border sales to consumers. A business that remains outside the OSS must be certain that it does not exceed the applicable threshold, that it is using its local records correctly, or that its operations fall outside the scheme.

When does a Spanish company join the system?

A company established in Spain that makes intra-Community distance sales of goods to consumers must normally apply the VAT rate of the customer’s Member State when the total of those B2C sales and certain digital services exceeds the annual threshold of 10,000 euros for the whole of the EU. The EU’s OSS allows these transactions to be declared from Spain, avoiding the need for separate registrations in each country of destination. It is also possible to opt for taxation at the destination before exceeding the threshold.

For goods imported from outside the EU in consignments where the intrinsic value does not exceed €150, the IOSS allows VAT to be charged at the point of purchase and declared via a single return. In certain sales, an electronic interface may become a “deemed supplier”. This distinction is crucial: the platform’s contracts and reports must identify who has the legal obligation to charge and pay VAT.

In Spain, registration for these schemes is processed using Form 035 and returns are submitted using Form 369. These returns are additional and do not replace the standard Spanish reverse charge procedure. For example, input VAT is not deducted on Form 369, but on Form 303.

Stock movements present another challenge. Holding goods in another Member State may still require local registration; therefore, the company must identify where the goods are stored, who owns them and from which country each consignment originates.

In conclusion, the Commission’s latest figures show that OSS and IOSS have evolved from being a reform into becoming infrastructure. They reduce multiple registrations, but do not simplify the underlying issues: customer status, destination, location of stock, the role of platforms and the tax rates to be applied in each country. For Spanish online sellers, the prudent course of action is a data-driven review of VAT before growth – or an audit – exposes any shortcomings.

On 10 September 2026, the European Commission launched a public consultation to adapt VAT to the circular and low-carbon economy. The initiative focuses on three practical areas: second-hand goods, the destruction of products that are still usable, and the VAT deduction for company cars.

No legislative changes have yet been approved, but the consultation offers an insight into the possible future direction of European policy. Spanish companies operating in the retail, transport or sustainability sectors should analyse how the current rules influence their decisions.

Why VAT matters in the circular economy:

VAT was designed to tax transactions, not to reward environmental outcomes. This can create friction when a product is repaired, resold, shared or taken off the market, rather than following a linear chain from the manufacturer to the consumer.

The consultation forms part of the preparatory work for the future European Circular Economy Act. It will remain open until 4 November 2026, whilst the assessment and impact analysis are expected to continue until early 2027. Any proposal to amend the VAT Directive would follow later and would have to go through the European legislative procedure and subsequently be transposed into national law. It is therefore essential to distinguish the debate now underway from the rules currently in force.

Second-hand goods and the margin scheme:

The first section concerns the treatment of second-hand goods. European legislation allows resellers, in certain circumstances, to calculate VAT on their profit margin rather than on the total sale price. Spain applies this option through the special scheme for second-hand goods, works of art, antiques and collectors’ items.

The scheme prevents the re-taxation of value on which VAT has already been paid when a product re-enters the commercial circuit, particularly if it was purchased from a private individual or another reseller who applied the same system. However, its requirements, registration obligations and international application can be complex. Furthermore, current circular economy models go beyond traditional second-hand trade and include digital platforms, refurbished devices, buy-back schemes and return systems managed by manufacturers.

The consultation allows for an assessment of whether the scheme remains appropriate for these activities. Spanish businesses must check, amongst other things, whether their procurement channels meet the requirements, whether repair or refurbishment alters the classification of the goods, how the margin is calculated, and whether their systems correctly distinguish these transactions from those subject to the general scheme.

Destruction of goods that are still usable:

The second area concerns the destruction of products that could still be put to use. The Commission is examining whether VAT rules might make disposing of stock more attractive than donating, repairing, reusing or reselling it.

In Spain, the VAT deduction is linked to the intended business use of the goods and services. The VAT Act also contains specific rules regarding the loss or destruction of goods. If this is due to a cause not attributable to the taxable person and is duly justified, there is no requirement to adjust the initial deduction. In other cases, different consequences may arise, including issues relating to own use, changes in intended use or the sufficiency of evidence.

The consultation does not, at present, introduce a new tax on the destruction of stock. Its immediate relevance is strategic: businesses holding obsolete, returned, seasonal or slow-moving stock should calculate the tax cost of destroying, donating, reselling or recycling such items before choosing an option. Documentation must demonstrate what happened to the goods and why.

Passenger cars used in business:

The third section — the VAT deduction for passenger cars — is of particular importance in Spain. Article 95 of the VAT Act generally presumes that 50 per cent of the use of passenger cars is for business purposes. A higher deduction may be claimed if greater business use can be proven. Certain categories, such as vehicles used for passenger transport, driving instruction, travel by sales representatives or security patrols, are presumed to be used 100 per cent for business purposes.

The Commission is examining whether the European framework remains appropriate for a low-emission economy. Business fleets now incorporate electric vehicles, subscriptions, car-sharing schemes and mixed-mobility solutions that do not always fit within traditional criteria. A future reform could influence purchasing or leasing decisions, fleet policies, charging costs and the means of proving business use.

In the meantime, Spanish regulations remain unchanged. Businesses claiming deductions in excess of the presumed percentage should retain objective evidence: travel logs, internal policies, parking conditions, visit schedules and restrictions on private use. The mere inclusion of the vehicle in the accounts does not, in itself, prove its business use.

Practical implications:

The consultation does not require any immediate changes to self-assessment returns. However, companies may:

• identify transactions involving used, returned, reconditioned or donated goods;
• review when they choose to dispose of stock and compare the cost of doing so with other alternatives;
• verify the evidence supporting vehicle deductions;
• ensure that accounting systems distinguish between the margin scheme and the general scheme; and
• provide practical information to the Commission by 4 November 2026, either directly or through a sectoral association.

In conclusion, the initiative does not yet amend the law, but it recognises a real problem: VAT can determine whether a circular model is commercially viable. Spanish businesses should use this period to identify costs, uncertainties and administrative burdens arising from the current system. This analysis will improve current compliance and facilitate adaptation to any future reform.

Order HAC/623/2026, of 12 June, introduces changes to both the content and filing deadlines of Form 210 for Non-Resident Income Tax, in relation to imputed income from urban properties and income derived from rented or sublet properties.

Changes to the content of Form 210

From 1 January 2027, the tax returns filed must include the following changes:

• A new annex providing a breakdown of deductible expenses relating to rented or sublet properties.
• A new “Number of days” box, to indicate the number of days during which the property has been available to the taxpayer or has been rented out.
• A new “Ownership percentage” box, to indicate the taxpayer’s percentage ownership of the property.

These changes will apply to tax returns filed from 1 January 2027 onwards, regardless of the date on which the income arose.

Imputed income from urban properties

The filing period will run from 1 April to 31 December of the year following the year in which the income arises, instead of starting on 1 January.

This new deadline will apply for the first time to imputed income corresponding to the 2026 tax year, which must be declared between 1 April and 31 December 2027.

Imputed income corresponding to 2025 will retain the usual filing period, from 1 January to 31 December 2026.

Income from rented or sublet properties

Tax returns resulting in an amount payable must be filed during the first 20 calendar days of April of the year following the year in which the income arises, regardless of whether the income is declared separately or on an aggregated basis.

Where payment is made by direct debit, the deadline will run from 1 to 15 April.

For income declared on an aggregated basis, the new deadline will apply to income corresponding to the 2026 tax year.

Where income is declared separately, the new deadline will apply only to income arising during the final quarter of 2026.

Therefore, a non-resident taxpayer who rented out their property during July, August and September 2026 and chose to declare each rental income amount separately must file the corresponding Form 210 returns, without the latest amendments, during the first 20 calendar days of October 2026.

For rental income corresponding to October, November and December 2026, Form 210 must be filed incorporating the latest amendments introduced by Order HAC/623/2026, within the period from 1 to 20 April 2027.

In addition, for income arising from 2024 onwards, the aggregation period for rental income from properties is annual.

These changes affect both the content of Form 210 and the filing deadlines applicable to certain types of property income obtained by non-resident taxpayers.

At MDG Advisors, we can assist non-resident clients with reviewing their tax obligations in Spain, as well as with the preparation and filing of their Form 210 tax returns in accordance with the applicable regulations.

In its judgment 988/2026 of 23 July 2026, the Supreme Court has confirmed that the Tax Agency may verify VAT balances pending set-off arising from periods for which the limitation period has expired when these are carried forward and applied to a subsequent period that is still open for assessment. The decision is particularly relevant for businesses with accumulated VAT balances to be offset.

What has the Supreme Court decided?

The case concerned a company whose VAT periods for the first three quarters of 2015 had become time barred. However, the balance generated in those periods was carried forward to the fourth quarter of 2015, which was still subject to assessment. The company argued that the limitation period prevented the Spanish Tax Agency (AEAT) from re-examining the underlying transactions: according to its argument, the Agency could only verify that the balance had been carried forward correctly but could not review its origin or amount.

The Supreme Court rejects this distinction. It considers that an outstanding VAT balance awaiting set-off constitutes a tax credit. Where such a credit affects the calculation of VAT for a period not subject to the limitation period, the AEAT may verify its existence, origin and amount, even though it can no longer issue an assessment relating to the period in which it arose. This does not mean that the historical period is reopened. The tax authorities cannot demand an additional tax liability relating to a period for which the limitation period has expired. They may, however, reduce or eliminate the historical credit when it is used to determine the amount to be paid or refunded in a subsequent open period.

Four years and ten years: two different time limits

The judgement highlights a key distinction in the General Tax Law. The AEAT’s right to determine a tax liability generally becomes time-barred after four years. However, following the reform introduced by Law 34/2015, the power to verify certain tax bases, tax liabilities, deductions and tax credits is subject to a specific ten-year time limit.

Both time limits serve different purposes. The four-year time limit determines whether a specific period can be assessed. The ten-year time limit defines the scope for auditing a historical tax credit that continues to have an effect on an open period. The Supreme Court expressly applies this distinction to VAT balances pending offsetting.

There is, furthermore, another four-year period which should not be confused with the previous ones. Under VAT regulations, where deductible input VAT exceeds output VAT, the excess may be offset against subsequent self-assessments provided that four years have not elapsed since the submission of the self-assessment in which it arose. This is the time limit for the taxpayer to utilise the credit, not the time limit for the tax authorities to verify its validity.

Why is this ruling significant?

The accumulated VAT balance to be offset, as shown on Form 303, is not automatically validated simply because the original return is old. If the Spanish Tax Agency (AEAT) audits a subsequent period, it may request the invoices, accounting records and business evidence justifying the carried-forward amount.

The risk is particularly significant for:

• companies that accumulate VAT credits during construction phases, when starting up operations or during investment;
• property companies with high refurbishment or development costs;
• groups that have changed their accounting software; and
• entities involved in mergers, demergers, business transfers or liquidations.

Conclusion

Judgment 988/2026 confirms that the limitation period prevents a closed VAT period from being reassessed but does not automatically render any credit arising from that period valid. For businesses, the conclusion is clear: a VAT credit is only as sound as the documentation supporting it. Retaining and organising historical records is, therefore, an active measure of tax compliance.

Artificial intelligence is redefining professional services.

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In this new landscape, agile firms have a unique opportunity to compete at the highest level.

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https://www.expansion.com/juridico/opinion/2026/07/22/6a6081cf468aebff068b45b1.html

The Spanish Tax Agency has issued an important clarification regarding the changes introduced by Order HAC/623/2026 to Form 210, which is used by non-resident taxpayers to report Spanish-source income without a permanent establishment.

The key point is that the new filing deadlines do not apply to all 2026 rental income declared separately.

For non-resident taxpayers declaring rental income from Spanish properties on a separate basis, income accrued in April, May, June, July, August and September 2026 keeps the existing filing deadlines:

• April to June 2026: filing during the first 20 calendar days of July 2026.
• July to September 2026: filing during the first 20 calendar days of October 2026.

The new April filing deadline will only apply, for separately declared rental income, to income accrued in the last quarter of 2026.

For rental income declared on an annual grouped basis, the 2026 income will be filed between 1 and 20 April 2027.

For deemed income from urban real estate, the filing deadline for 2025 remains unchanged: 1 January to 31 December 2026. For 2026 deemed income, the new filing period will run from 1 April to 31 December 2027.

The Order also introduces changes to the content of Form 210, including a new annex for deductible expenses and new fields for the number of days and ownership percentage. These content changes will apply to returns filed from 1 January 2027.

The subsequent correction of errors does not alter these conclusions, as it does not affect Form 210 deadlines.

At MDG Advisors, we recommend reviewing the filing calendar carefully to avoid applying the new deadlines too broadly, especially for separately declared rental income accrued before the last quarter of 2026.

The recent removal of Gibraltar from Spain’s list of non-cooperative jurisdictions marks a significant milestone in the tax relationship between the two territories. While the announcement has been widely anticipated by tax professionals, the key question now is not whether the change has happened, but what practical consequences it will have for businesses, investors, and cross-border structures.

A Long-Awaited Development

For years, Gibraltar’s inclusion on Spain’s tax haven list triggered a series of anti-avoidance measures affecting both corporate and individual taxpayers. These rules imposed additional compliance obligations, limitations on certain tax benefits, and stricter scrutiny of transactions involving Gibraltar.

The removal reflects the increasing level of cooperation and transparency between the Spanish and Gibraltarian tax authorities and aligns with the objectives of the Tax Treaty signed between Spain and Gibraltar.

Which Taxes Are Affected?

The practical impact extends across several areas of Spanish taxation, including:

Corporate Income Tax (CIT)

Spanish companies engaging in transactions with Gibraltar may benefit from a more favourable tax treatment, particularly regarding transfer pricing presumptions, deductibility of expenses, and the application of certain anti-abuse provisions.

Personal Income Tax (PIT)

Individuals with investments, income streams, or economic ties to Gibraltar may see changes in reporting obligations and the application of specific anti-avoidance rules.

Non-Resident Income Tax (NRIT)

The treatment of payments between Spain and Gibraltar may become less restrictive, reducing certain compliance burdens previously associated with transactions involving a listed jurisdiction.

Wealth and Succession Planning

Structures involving Gibraltar entities may now be analysed under a different framework, potentially creating opportunities for more efficient cross-border planning, subject to the specific facts of each case.

When Does the Change Apply?

An important aspect of the reform is its effective date.

The general principle is:

➡️ For non-periodic taxes, the new status applies from the date the removal enters into force.

➡️ For periodic taxes, the change applies to tax periods beginning after that date.

This distinction is crucial when assessing ongoing transactions, corporate structures, and compliance obligations.

What Should Businesses Do Now?

Companies and individuals with connections to Gibraltar should review their current structures and assess:

• Whether any anti-tax haven provisions cease to apply.
• The impact on existing financing, holding, or investment arrangements.
• Potential opportunities to simplify compliance requirements.
• Whether historical positions require reassessment in light of the new framework.

Looking Ahead

Although the removal of Gibraltar from Spain’s tax haven list is undoubtedly positive news for cross-border business activity, its real significance lies in the detailed application of Spanish tax legislation. Each structure should be reviewed individually to determine the practical benefits and any remaining compliance obligations.

For businesses operating between Spain and Gibraltar, this development may open the door to greater certainty, improved tax efficiency, and a more predictable legal environment.

At MDG Advisors, we are closely monitoring the implementation of these changes and helping clients assess their impact on international tax structures and cross-border investments.

Relocating to Spain can be an exciting step, whether for professional, business, investment or personal reasons. However, one of the key tax aspects to review before moving is the potential risk of being taxed in two countries at the same time.

When an individual becomes tax resident in Spain, they may generally be subject to Spanish tax on their worldwide income. This can create questions when income is also connected to another country, such as salaries, pensions, dividends, rental income, capital gains or business income.

This is where Double Tax Treaties become especially important.

Spain has signed a wide network of treaties with other countries to avoid double taxation. These treaties help determine which country has the right to tax certain types of income and, where both countries may tax the same income, how double taxation can be relieved.

In practice, this may involve applying exemptions, tax credits, reduced withholding tax rates or specific treaty rules depending on the type of income and the countries involved.

However, applying a treaty correctly is not automatic. It is essential to analyse tax residence, the source of the income, local Spanish rules, the applicable treaty and the documentation required by the tax authorities.

A proper review before relocating to Spain can help avoid unexpected tax liabilities, penalties or duplicated taxation.

At MDG Advisors, we would be delighted to assist you with your relocation to Spain and help you understand how Double Tax Treaties may apply to your personal or business situation