Invoicing US Clients From Spain

VAT

A service supplied to a business established in the United States is not subject to Spanish VAT: for business customers, the service is treated as supplied where the customer is. The invoice shows no VAT and a short note explaining why, and it is reported on the quarterly VAT return among the transactions not subject to Spanish VAT.

Private individuals are different. Whether Spanish VAT applies to a service for a consumer in the United States depends on the type of service. For consulting, advertising, legal and similar services it generally does not; for others it does. This should be checked for your activity before the first invoice.

What the invoice must contain

• A number in an unbroken sequence, and the date of issue.
• Your full name, Spanish tax number and address.
• The client's name and address, and its tax identification where it has one.
• A description of the service and the period it covers.
• The amount, the VAT treatment and the reason no Spanish VAT is charged.

The invoice can be in English and in dollars. Spanish law requires the VAT amount, where there is one, to be expressed in euros; with no VAT on the invoice, a dollar invoice is fine, but your books still need the euro equivalent.

The forms a US client sends

US companies routinely ask foreign contractors for form W-8BEN. It certifies that you are not a US person and, for services performed entirely outside the United States, supports paying you without US withholding. It is a declaration to the payer, not a filing with the US tax authority. US citizens living in Spain are in a different position: they remain US persons and are asked for form W-9 instead.

Dollars and euros

Income is recorded in euros at the exchange rate on the date the service is invoiced or completed, not the rate the bank gives when the money arrives. The difference between the two is a separate exchange gain or loss. Keeping the rate and its date next to each invoice saves hours at the end of the year. The details are in our guide to foreign-currency invoices.

Because US clients do not withhold Spanish tax, the quarterly income tax instalment, form 130, is almost always due.

Wording that works

There is no compulsory text, but an invoice to a US business usually carries a line to this effect: "Service not subject to Spanish VAT under the place-of-supply rules: customer established outside the European Union." For readers at the client's end, adding "No VAT charged" avoids questions.

State the payment terms, the currency and the account details clearly. If you are paid in dollars into a multi-currency account, give those details and not a euro account that will trigger a conversion at the sender's bank.

Getting paid

US clients commonly pay by bank transfer, through a payment platform, or occasionally by cheque, which Spanish banks handle slowly and expensively. Whatever the channel:

• The invoice is for the amount agreed. Transfer fees and platform commissions are your expenses, recorded separately.
• Keep the platform's monthly statement: it is the supporting document for those commissions.
• If the client's accounts department needs a supplier form, complete it consistently with your tax status. A non-US person resident in Spain gives the W-8BEN; a US citizen gives the W-9.
• A year-end form reporting what a US client paid you may be sent to a US citizen. It should reconcile with your Spanish invoices once converted.