VERI*FACTU arrives in 2027. Affected businesses will need to adapt their invoicing software. What it means for you →
GLOSSARY
Your gestoría dictionary
Spanish tax, accounting and employment terminology, explained clearly.
INVOICING AND VERI*FACTU
Invoicing and VERI*FACTU
- VERI*FACTU
- An invoicing system certified under Spanish Tax Agency rules that creates a tamper-proof record of every invoice and can send it automatically to the tax authority. It forms part of the invoicing regulation under Royal Decree 1007/2021 and is being introduced in phases from 2026. Invoices issued under VERI*FACTU include a QR code and the wording “VERI*FACTU”.
- Full invoice vs simplified invoice
- A full invoice contains all of the recipient’s tax details —tax ID, name and address— and is required for business-to-business transactions or when the customer requests one. A simplified invoice, formerly known as a till receipt, is permitted for lower-value consumer transactions and does not require the recipient to be identified.
- Corrective invoice
- A document that corrects or cancels an invoice already issued, for example because of an incorrect amount, a return or a later discount. It must expressly refer to the original invoice and meet the same formal requirements as any other invoice.
- Summary invoice
- A single invoice grouping several transactions for the same recipient within one calendar month instead of issuing a separate invoice for each supply. It must be issued no later than the final day of the month in which the transactions took place.
- Electronic invoicing (Create and Grow Law)
- The obligation under Law 18/2022 to issue and send invoices between businesses and self-employed professionals in a structured electronic format, not merely as a PDF. The implementing regulation and final commencement timetable remain subject to approval by the Spanish tax authority.
- Invoice number and series
- Every invoice must carry a consecutive number within a series, without gaps or duplicates, so it can be identified uniquely. Separate series are commonly used for corrective invoices, different business lines or each calendar year.
- Tax point
- The moment a transaction is deemed to take place for VAT purposes, which is not always the same as the invoice date or payment date. It determines the reporting period in which the corresponding VAT must be declared.
- Taxable amount
- The amount on which VAT is calculated: the price of the goods or service before tax is applied. The applicable VAT rate and, where relevant, personal income tax withholding are applied to this taxable amount.
- Retail equivalence surcharge
- A special Spanish VAT scheme for individual retail traders who sell unaltered products to final consumers. The supplier charges additional VAT known as the equivalence surcharge and, in return, the retailer is normally exempt from filing VAT returns for those sales.
- Disbursements paid on a client’s behalf
- Costs a professional pays in the name and on behalf of a client —such as fees, duties or stamp charges— and then passes on without a margin or additional VAT, supported by the original invoice in the client’s name. They do not form part of the taxable amount for the professional’s services.
TAXES AND RETURNS
Taxes and returns
- Output VAT
- VAT a self-employed professional or company charges customers on sales invoices and must pay to the tax authority after deducting eligible input VAT. It is calculated by applying the relevant rate to the taxable amount of each transaction.
- Input VAT
- VAT a self-employed professional or company pays on purchases and expenses connected with the business and may deduct from output VAT in the quarterly return. Only VAT on properly documented costs attributable to the economic activity is deductible.
- Form 303
- The quarterly Spanish VAT self-assessment reporting output VAT, deductible input VAT and the resulting amount payable, carried forward or refundable. It is filed in the first twenty calendar days of April, July and October, and by 30 January for the fourth quarter.
- Form 390
- The annual VAT summary consolidating the information from the four Form 303 returns filed during the tax year. It is filed in January of the following year, although some taxpayers with limited turnover are exempt.
- Form 130
- A quarterly advance payment of Spanish personal income tax for self-employed professionals under the direct assessment method, based on a percentage of net profit for the quarter. Amounts paid are later deducted in the annual income tax return.
- Form 111
- The quarterly return for withholding and payments on account applied to employment income, professional fees and certain business income. It is filed by the person or business making the payment and withholding the tax, not by the recipient.
- Form 115
- The quarterly return for withholding and payments on account relating to rent from urban property. It is filed when the tenant is required to withhold part of the rent paid to the landlord.
- Form 190
- The annual summary of withholding reported through Form 111 during the tax year, including details for each recipient. It is filed in January of the year following the year to which the withholding relates.
- Form 347
- An annual information return covering transactions with any third party that exceed €3,005.06 including VAT over the year. Businesses and self-employed professionals file it so the tax authority can cross-check amounts reported by suppliers and customers.
- Personal income tax withholding
- A percentage deducted from an invoice or payroll payment and paid directly to the tax authority on account of the recipient’s personal income tax. The general rate on professional invoices is 15%, reduced to 7% when starting an activity and for the following two years.
- Direct assessment vs objective assessment
- Direct assessment calculates actual net profit —income minus deductible expenses— and is the default method for most self-employed professionals. Objective assessment, commonly called the modules system, determines profit from business indicators rather than actual income and costs; it is only available to certain activities below defined turnover limits.
- Late-filing surcharges
- An additional percentage charged when a self-assessment is filed late without a prior demand from the Spanish tax authority. The surcharge increases with the delay and replaces a penalty, although late-payment interest may also apply when the delay exceeds one year.
- Late-payment interest
- An amount added to tax debt paid late, calculated by applying the statutory interest rate to the amount owed for the elapsed period. It applies, for example, to payment deferrals, instalment arrangements and assessments following a tax review.
ACCOUNTING AND BANKING
Accounting and banking
- Bank reconciliation
- The process of comparing bank-statement transactions with a company’s accounting records to confirm that they agree or to identify and correct differences. It is essential for finding unrecorded receipts or payments and possible errors.
- Sales and purchase invoice registers
- Mandatory records in which self-employed professionals and companies list all invoices issued and received in chronological order with the relevant tax details. They form the basis for calculating VAT and supporting the accounts during a tax inspection.
- Depreciation and amortisation
- The accounting recognition of an asset’s loss of value —equipment, a vehicle, premises or software— over its useful life, deducted progressively instead of entirely in the year of purchase. The tax authority publishes maximum and minimum coefficient tables for different asset types.
- Deductible expense
- An expense that can be subtracted from income to calculate net business profit, provided it is connected with the economic activity, supported by an invoice and recorded in the accounts. Not every business-related cost automatically meets these requirements; mixed-use or difficult-to-evidence expenses are common areas of doubt.
- SEPA payment batch
- A group of collection or payment orders sent to the bank in one file, commonly used to collect customer direct debits or pay payroll and suppliers. It follows the European SEPA standard for either direct debits or credit transfers.
- Filing receipt and secure verification code
- A document generated by the Spanish Tax Agency when a self-assessment or return is filed, carrying a secure verification code known as a CSV that can be used to confirm authenticity. It proves that the filing was completed successfully and on time.
- Year-end close
- The set of procedures performed at the end of an accounting period, normally the calendar year, to verify, adjust and close the ledgers before preparing annual accounts or tax returns. It includes reviewing depreciation, provisions and outstanding reconciliations.
- Spanish General Accounting Plan for SMEs
- The rules setting the principles, valuation criteria and chart-of-accounts structure Spanish companies must follow. A simplified version for small and medium-sized companies, known as the SME General Accounting Plan, has fewer requirements than the full plan.
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