How to avoid subsidiary liability of Spanish tax debts of a supplier?

Only paying the invoice of your suppliers in Spain is not enough! In order to avoid fiscal liabilities of your suppliers it is not enough to just ask for your invoice and pay the sum due. The fiscal advisors of our law firm in Marbella have the pleasure to inform you what is recorded in article 43.1.1f) of the General Tax Law in Spain.

1) The following persons or entities will be subsidiary liable of tax debts in Spain:

f) Persons or entities that contract or subcontract the execution of works or rendering of services related to their main economic activity, shall be liable of the Spanish tax obligations related to taxes that must be passed on or amounts that must be withheld of employees, professionals or businessmen, for that part that corresponds to the works or services object of the contract or subcontract.

The liability mentioned above shall not be callable when the contractor or subcontractor has given the payer a specific certificate of being up to date in all tax obligations in Spain issued for such purpose by the Tax Office ( Inland Revenue in Spain ) during 12 months prior to the payment of each invoice related to the contract of subcontract.

Therefore, in case a company or natural person, fiscal resident in Spain and exercising an economic activity, must pay an invoice for service rendering to a supplier, it shall be convenient to ask for and require not only the corresponding original invoice but also a certificate issued by the Spanish Tax Office that certifies that the supplier is up to date in his tax obligations.

In case of not having this certificate at his disposal, the payer of the invoice shall be subsidiary liable of any possible debt that the supplier might have with the Inland Revenue in Spain.

Click here for read previouse post under the subject “Tax in Spain” .

Do not hesitate to contact any of our English Speaking lawyers and/or fiscal advisors of our law firm in Marbella. It will be our pleasure to assist any of your questions, whether on fiscal, legal or accounting issues.

María Teresa Arcos, lawyer in Marbella, Malaga, Spain.

Wim Lamers, economist in Marbella, Malaga, Spain.