Spanish Companies asking me for a CIF/NIF Number to invoice my Ltd. company

[RSS_UK]

Hi,

Our company needs to trade with Spanish companies on a regular basis due to the nature of our business but we are finding problems when it comes to invoicing.

Apparently, all companies in Spain need us to provide them with our CIF/NIF Number, which is something similar to our VAT registration number.

Since our company is not over the VAT threshold yet, we have provided them with our UTR number (Unique Tax Reference) but they are telling us this number is not correct or acceptable for the Spanish Tax Authorities and that this number should be 5, 9 or 12 digits long.

Has anyone got experience dealing with spanish companies? Anyone able to help?

Do we need to obtain a different number if we want to trade with companies outside the UK?

Thanks a lot, any help will be much appreciated.

Regards

 

[mungry]

You are being asked for the company's CIF number. This is the tax ID number for all companies.

This will be a letter followed by 8 digits. eg N12345678.

If your company is "non-resident" IN Spain the first letter will be N.

As far as I remember all business transactions in Spain attract VAT.

Have a look at the strongabogados website. It will point you in the right direction, at least.​

 

[RSS_UK]

Thanks mungry but that´s the whole point of my question, isnt it our company UTR our Tax ID number?

We are a Uk Ltd. Company, therefore, we dont need a CIF number, but we need to provide the spanish companies we trade with the equivalent.

As far as I know trough online research, that number should be the equivalent to the UK VAT registration number if I'm not mistaken, but we are non VAT registered yet as we are not over the limit, so in that case I thought our UTR would be more than sufficient?

Thanks for your help.

 

[Merchant UK]

Thanks mungry but that´s the whole point of my question, isnt it our company UTR our Tax ID number?

We are a Uk Ltd. Company, therefore, we dont need a CIF number, but we need to provide the spanish companies we trade with the equivalent.

As far as I know trough online research, that number should be the equivalent to the UK VAT registration number if I'm not mistaken, but we are non VAT registered yet as we are not over the limit, so in that case I thought our UTR would be more than sufficient?

Thanks for your help.

If you are not from Spain or have a business there then you probably could not put anything here


Nif is what in the UK would be the National Insurance number for an individual. You can get them by registering at the municipal police
stations where you are in reality getting permission to work.

Cif is the version for companies.
You can work in spain validly without a Cif and do it autonomo (or self
employed if you like)but never without a NIF

 

[RSS_UK]

Ok, I think I´m not explaining myself correctly.

We are a UK Company, an Ltd, actually.

Due to the nature of our business, we usually deal with Spanish Companies.

I´m perfectly aware of what a NIF and CIF number is as I´m Spanish myself, although my company is established in the UK and is therefore a UK Company.

My problem is, when spanish companies we work with need to invoice my company (Non spanish and UK established), apparently, Hacienda, which is the HMRC of Spain (Tax authority) ask them for our CIF number wich we obviously dont have as we are not a spanish company.

Most of this companies will even refuse to provide us with an Invoice if we dont facilitate them with a valid CIF number which as far as my understanding goes, we are not required to have by law, being a non spanish company.

Therefore, my original question remains the same, which number would be the equivalent in UK to the CIF number in Spain? Is it the company VAT registration number? What if non VAT registered?

Anyone heard about EU VAT Registry (Censo VIES in Spain)?

Do we really need to obtain this number in order to trade with spanish companies or any other country in the EU for that matter?

Thanks a lot

 

[Merchant UK]

I think thats similar to asking a customer in africa for a UK national Insurance number if they want to Trade with you???

As your not in spain or conduct none of your business in spain, you need to explain to them that your do not have a Nif or Cif Number as you are a British Company and Not spanish.

You say your spanish, but have you spoken to them about this??

 

[Merchant UK]

Anyone heard about EU VAT Registry (Censo VIES in Spain)?

Its the bog standard EU Vat Checker, which companies throughout the EU can varify Vat Registration Numbers

http://ec.europa.eu/taxation_customs/vies/vieshome.do

 

[RSS_UK]

I think thats similar to asking a customer in africa for a UK national Insurance number if they want to Trade with you???

As your not in spain or conduct none of your business in spain, you need to explain to them that your do not have a Nif or Cif Number as you are a British Company and Not spanish.

You say your spanish, but have you spoken to them about this??

I have, yet they keep asking for this CIF number and after providing them with our UTR (as by law we dont need to be VAT registered yet), they say I´m not giving them the correct number cause they cant check it on that VIES Registry?? :|

Is really confusing as this is now the second time its happening with two different companies.

Thanks Merchant UK

 

[Merchant UK]

I have, yet they keep asking for this CIF number and after providing them with our UTR (as by law we dont need to be VAT registered yet), they say I´m not giving them the correct number cause they cant check it on that VIES Registry?? :|

Is really confusing as this is now the second time its happening with two different companies.

Thanks Merchant UK

The VIES Registery is only used to check companies which are VAT Registered, But asking you for a VAT number they assume you're vat registered, You'll need to explain to them that you are not vat registed and cannont supply a number which would be seen as fraudulent.

I think the issue as you rightly said companies in spain are all registered for vat from day one, i think its just a habbit with them to check vat numbers on orders etc...

You need to explain to them that we do things differently here and to get someone who understands what your trying to explain to them.



Let us know how you got on!!

 

[RSS_UK]

http://www.proz.com/forum/business_..._companies_when_youre_not_vat_registered.html

Extracted from this forum thread:

“There's a lot of controversy regarding this issue, maybe knowing what happens in the other side can help a little bit.

Letting aside personal thoughts (or disagreements), according to Spanish Law is mandatory to work ONLY with VAT-registered professionals (in case we are hiring their services) within the EU, and to verify their EU-VAT number before starting a business relationship with them (through VIES). It is also mandatory for a Spanish company or freelance professional to be VAT-registered in order to trade within the EU.

I know cases in which colleagues failed into providing VAT-numbers of fellow translators and were fined. Having faced this issue a couple of months ago, I asked Spanish colleagues what to do, as I don't feel comfortable asking someone to register if s/he is not obliged to, and I fully agree that red tape doesn't help to improve productivity and business relationships. And there's nothing that can be done. I cannot accept invoices from unregistered professionals.

Your UTR or Insurance # is not valid. Your VAT # must be GB + 5/9/12 digits, you receive it after registration. It takes a time and you would be requested to fill in quarterly VAT forms. So the decision is up to you. You may consider it if dealing with Spanish companies represent a considerable part of your income.”

 

[RSS_UK]

Looks like I'm forced to register for VAT if I am to make business with Spanish companies???

It certainly annoys me that the country my company is established doesnt require me to be VAT registered but if I want to trade with Spanish companies looks like I'm on a dead end?

Frustrated...

 

[mungry]

From memory RSS, all Spanish companies must have a CIF number and therefore as all business transactions attract VAT in Spain the CIF number is always required. (Can't remember if the VAT registration number would add ES to the front of the CIF ie. ESN12345678).

As you aren't VAT registered in the UK and don't seem to have any need to be so, would there be any mileage in setting up a Spanish registered company to trade in Spain. The CIF number would therefore be granted to this company.

I know it seems a bit long winded but at least any trade you do with Spain would be kept seperate.

Just a thought.

 

[Merchant UK]

Looks like I'm forced to register for VAT if I am to make business with Spanish companies???

It certainly annoys me that the country my company is established doesnt require me to be VAT registered but if I want to trade with Spanish companies looks like I'm on a dead end?

Frustrated...

I can't understand why the Spanish company still expects you to be vat Registered??? The Law in the UK is different to theirs and they should make an exception for dealing with companies that are not vat registered.

have you thought about voluntry registration with the vat? You can register if your turnover falls below the limit required but at least you'll be able to trade with them.

I guess when you set up a spanish company, your vat number is generated automatically, and its this that they check.

What type of goods is it that your buying from spain??

 

[RSS_UK]

I can't understand why the Spanish company still expects you to be vat Registered??? The Law in the UK is different to theirs and they should make an exception for dealing with companies that are not vat registered.

Apparently, all companies in Spain need to be VAT registered from day 1 and companies need check on VIES registry before starting any business relationship with foreign companies. Silly, I know, but that's the way they seem to be doing things over there.

have you thought about voluntry registration with the vat? You can register if your turnover falls below the limit required but at least you'll be able to trade with them.

I've thought about it but not an option at the moment, unless I'm obliged to by turnover. Charging VAT will significantly increase prices and possibly affect negatively on my sales which at the moment are pretty good.

I guess when you set up a spanish company, your vat number is generated automatically, and its this that they check.

Your completely right on that.

What type of goods is it that your buying from spain??

We are a music production and promotion company, basically focused on the UK spanish market. What we sell is tickets for the events we produce, live concerts and club nights mostly and we sell them directly trough our website.

Registering for VAT would be very damaging at the moment as for example if we were to sell a ticket for one event, at say £20, which is the average price for them, we would either have to swallow up those £4 of VAT and therefore get a lesser marging of profit on each ticket sold or increase the price to £24, which would obviously cause more damage than good seriously affecting sales.

The problem is that WE NEED to trade with spanish companies mainly because all the artists and bands we book are spanish and therefore, their companies need to Invoice mine for any fees paid to them from the event's revenue.


Merchant UK, thanks a lot for your comments and interest on my case. Very kind of you for taking the time to try and help out with your advice.

Best regards

Fran

 

[RSS_UK]

From memory RSS, all Spanish companies must have a CIF number and therefore as all business transactions attract VAT in Spain the CIF number is always required. (Can't remember if the VAT registration number would add ES to the front of the CIF ie. ESN12345678).

As you aren't VAT registered in the UK and don't seem to have any need to be so, would there be any mileage in setting up a Spanish registered company to trade in Spain. The CIF number would therefore be granted to this company.

I know it seems a bit long winded but at least any trade you do with Spain would be kept seperate.

Just a thought.

Thanks for your comments mungry, but there seems to be an easier option which is registering for VAT from what I've found out.

The situation is kind of unfair anyway because the way I see it is, if the country where my company is registered and paying taxes doesnt require me to apply for VAT registration unless I reach a certain limit of revenue, why should I do it in order to be able to trade with another European country? Doesnt make much sense from my point of view.

Anyway, will have to think about a working solution pretty soon.

Regards

 

[mungry]

The situation is kind of unfair anyway because the way I see it is, if the country where my company is registered and paying taxes doesnt require me to apply for VAT registration unless I reach a certain limit of revenue, why should I do it in order to be able to trade with another European country? Doesnt make much sense from my point of view.

Because you do! . . it's that simple. You and Merchant UK seem to be focusing on the same belief. "If you run a UK registered company then you should be able to run it in a UK registered way". Which is fine . . . if you're only wanting to trade in the UK.

The Spanish, and many other countries, are effectively saying exactly the same thing, but from their side of the argument; and as you wish to trade in Spain you have to do it their way.

I tend to think they have a better system than ours in this respect. All companies have to register, and all companies, irrespective of size, are therefore vat registered. Cuts out a lot of the crap we have in this country.

 

[RSS_UK]

Because you do! . . it's that simple. You and Merchant UK seem to be focusing on the same belief. "If you run a UK registered company then you should be able to run it in a UK registered way". Which is fine . . . if you're only wanting to trade in the UK.

The Spanish, and many other countries, are effectively saying exactly the same thing, but from their side of the argument; and as you wish to trade in Spain you have to do it their way.

I tend to think they have a better system than ours in this respect. All companies have to register, and all companies, irrespective of size, are therefore vat registered. Cuts out a lot of the crap we have in this country.

Hi mungry,

Of course it makes sense, but from my point of view, at the moment if I registered for VAT it would negatively impact on the ticket sales for our nearer upcoming events which are already on sale at a fixed price of 20 sterling.

I know that sooner or later (more sooner than later to be honest) I´ll have no other choice but to do it, but if I can avoid it for as long as legally possible, I´ll be in no rush whatsoever of doing so. Just have to plan it so it doesnt hit me on the middle of an important event for which tickets have already been sold.

You are also right on your last quote, I think it would be better altogether if all companies were registered for VAT from day one, but who knows, maybe HMRC relies on fines as an important source of income on this particular case? That´s just me being cheeky

Thanks again

Fran

 

[mungry]

Of course it makes sense, but from my point of view, at the moment if I registered for VAT it would negatively impact on the ticket sales for our nearer upcoming events which are already on sale at a fixed price of 20 sterling.

Couldn't agree more.

In your position I would do some in depth research into opening a Spanish registered company, and especially how it would impact on your UK company taxes.

 

[Deleted member 313171]

Hi, I appreciate this thread is many years old now, I just wondered how you got on as I have a client in a similar situation. Thanks

 

[Scalloway]

I don't think any of the posters have been here for several years.

 

[justinaldridge]

Zoe, what's your particular question? I am actually resident in Spain but my business is in UK and I'm used to trading between the two countries. What do you need to know?