GLOSSARY

Spanish tax glossary

Clear definitions of the terms you need to know to manage your invoicing in Spain.

B

Base imponible (Taxable base)
The amount on which tax (VAT, income tax) is calculated. It's the invoice amount before taxes are applied.

C

CIF (Company Identification Code)
Former identification code for companies. Now replaced by the legal entity NIF, though the term is still colloquially used.
Cuota tributaria (Tax amount)
Result of applying the tax rate to the taxable base. It's the amount of tax to be paid.

D

Devengo (Accrual)
The moment when the tax obligation arises, regardless of when payment is made. For invoices, it's usually the issue date.

F

Factura proforma (Proforma invoice)
Pre-invoice document detailing the conditions of a transaction. Has no accounting or tax value.
Factura rectificativa (Corrective invoice)
Invoice that corrects errors or modifies a previous invoice. Required when amounts, tax data or product returns need to be modified.

H

Hecho imponible (Taxable event)
Circumstance or act that gives rise to the tax obligation. In VAT, it's the delivery of goods or provision of services.

I

IRPF (Personal Income Tax)
Direct tax on freelancer income. Applied as a withholding on invoices issued to companies, usually at 15% (7% for the first years).
IVA (Value Added Tax / VAT)
Indirect tax on consumption. In Spain there are three rates: standard (21%), reduced (10%) and super-reduced (4%).

M

Modelo 303 (Quarterly VAT return)
Quarterly VAT declaration that freelancers and companies must file. It records the output VAT (charged) and input VAT (paid) for the quarter.

N

NIF (Tax Identification Number)
Number identifying a natural or legal person before the Tax Agency. For individuals, it matches the national ID (DNI).

R

Recargo de equivalencia (Equivalence surcharge)
Special VAT regime for retail traders. Applies an additional percentage on the taxable base (5.2%, 1.4% or 0.5% depending on the VAT rate).
Retencion (Withholding)
Amount deducted from an invoice as advance tax payment (usually income tax). The payer sends that amount directly to the Tax Agency.

S

Sujeto pasivo (Taxable person)
Natural or legal person required to fulfill tax obligations. In VAT, it's whoever delivers goods or provides services.

T

Tipo impositivo (Tax rate)
Percentage applied to the taxable base to calculate the tax amount. The standard VAT rate in Spain is 21%.