Selling to Portugal is not exporting
The confusion starts with the vocabulary. Exporting means taking goods outside the European Union; selling to Elvas, Évora or Lisbon is an intra-EU supply, governed by other rules and other paperwork. On an intra-EU supply of goods to a Portuguese business the transaction is exempt in Spain and the tax is accounted for by the customer at destination, but that exemption is not automatic: it depends on meeting its conditions and on being able to prove them.
The two that always fail are the transport and the customer's VAT number. You must be able to show that the goods left Spain — consignment note, signed delivery note, carrier's document — and that the buyer held a valid intra-EU VAT number at the time of the transaction. Without that, the authorities may treat the supply as taxable here and claim the VAT, with the added misery that your customer is no longer going to pay it.
The ROI, box 582 and VIES
To trade this way you must be entered in the Registro de Operadores Intracomunitarios, Spain's register of intra-EU traders, applied for on Modelo 036 by ticking box 582. Two things are worth knowing. First, registration is neither immediate nor automatic: the authorities check first, may ask for evidence of the activity and may refuse. Second, the simplified Modelo 037 no longer exists: it was abolished by Orden HAC/1526/2024 with effect from 3 February 2025, so everything now goes through the 036.
Being on the ROI means appearing on VIES, the European database where the validity of those numbers is checked. And here is the habit that saves files: validate your customer's VAT number every time, not just the first time, and keep the result of the check with its date. Numbers are deregistered, companies close, and the exemption is defended with the proof from that day, not with your recollection.
The check takes seconds and the printout is worth keeping for four years, which is how long the Agencia Tributaria, the Spanish tax authority, has in which to review the transaction. The date, the number and the answer, filed alongside the invoice, are the whole of the defence.
Intra-EU transactions are also reported on Modelo 349, the recapitulative statement of intra-EU transactions, and its content is cross-checked against what your Portuguese customer reports in his own country. When the amounts do not match, the cross-check fires and the letter arrives. It is rarely fraud: it is usually an invoice booked in one quarter and reported in another, or a credit note that was forgotten. It can be fixed, but reconciling it beforehand costs less. We handle it in invoicing abroad from Spain.
Services, which follow another route
If what crosses the border is not goods but a service — a repair, a project, a piece of advice, a campaign — the rule changes. Between businesses, a service is generally located where the customer is established, so you invoice without Spanish VAT and the Portuguese customer applies the reverse charge. That service goes on the 349 as well.
With Portuguese private individuals the logic flips, and there are special rules for particular kinds of service. And with a customer who has no intra-EU VAT number, however much of a company it may be, there is no exemption to be had: you invoice with Spanish VAT. It is in the comparison invoicing inside or outside the EU.
Who writes to us from Badajoz
| Who | Where it gets complicated |
|---|---|
| Distributor selling to Portuguese wholesalers | Proof of transport and validation of the VAT number before the invoice is issued |
| Professional providing services across the border | Place of supply, reverse charge and Modelo 349 |
| Workshop or firm buying materials in Portugal | Intra-EU acquisitions, which are self-accounted here even though no VAT was paid to the supplier |
| Worker resident in Spain employed in Portugal | Tax residence, the treaty and the certificate that avoids double taxation |
| Portuguese owner of a house in the province | Modelo 210, per property and per owner |
Our way of working in Badajoz
Remotely, and with the focus where the risk is. With a client in Badajoz the first thing we look at is not the bookkeeping: it is the ROI, the history of VIES checks, and whether the 349 agrees with the 303 returns for the tax years still open, which are four because of the limitation period. If something does not add up, it is put in order before the cross-check finds it, because coming forward on your own initiative has a known cost and waiting for the letter does not.
We work in Spanish, English and French, and if the matter calls for a Portuguese adviser we say so plainly and coordinate with the one you appoint: we do not sell a network we do not have.
Living in Badajoz and drawing a salary in Portugal
This is the worker who crosses the border every morning: home, family and life in Badajoz, a contract with a company in Elvas or Campo Maior. He remains tax resident in Spain, so he declares his worldwide income here, Portuguese salary included. Portugal also taxes that salary, because the work is done there. The double taxation is corrected in the Spanish return: what was paid in Portugal is subtracted, up to a limit, which is the part of the Spanish tax that corresponds to that salary.
| Step | Sample figures |
|---|---|
| Gross salary in Portugal | 32,000 € |
| Portuguese tax shown on the employer's certificate | 6,500 € (assumed figure) |
| Part of the Spanish tax corresponding to that salary | 6,400 €, assuming an average rate of 20 % |
| Credit for international double taxation | 6,400 €: the lower of the two figures |
| What remains uncompensated | 100 €, which cannot be recovered in Spain |
The average rate is an assumption: the real one comes from your whole return and from the scale that applies that year. What is fixed is the mechanism, and one consequence that catches many people out: since the Portuguese employer is not required to withhold Spanish tax, the threshold below which you need not file drops to 15,876 €. With an ordinary Portuguese salary you have to file here, even though tax was already withheld there. There is also the exemption for work performed abroad, and whether it fits someone who sleeps in Badajoz every night is examined requirement by requirement, never assumed.
Social security runs on a separate track: under the EU coordination rules, someone who works only in Portugal generally contributes in Portugal, even while living in Badajoz. If you also carry on a self-employed activity in Spain, the rule changes and it is worth checking before you register.
The Badajoz cross-border worker's tax year
| When | What you need to have or file |
|---|---|
| January and February | The annual certificate of earnings and tax withheld issued by the Portuguese employer |
| When the company asks for it | Certificate of Spanish tax residence, so that the treaty is applied there; it is requested online, as explained in the tax residence certificate |
| 1 January to 31 March | Modelo 720 if your Portuguese accounts exceed 50,000 € |
| April to June | Spanish income tax return with the Portuguese salary and the double taxation credit |
| Whatever falls due in Portugal | Handled by your Portuguese adviser; we coordinate with them where the two overlap |
What almost nobody in Badajoz asks: the Portuguese account you are paid into counts for Modelo 720, the Spanish return listing assets held abroad. If its balance at 31 December, or the average balance for the last quarter, exceeds 50,000 €, added to any other accounts abroad, it has to be declared between January and March. Once filed, it is not repeated each year unless that block rises by more than 20,000 € or you stop holding one of the accounts. With years of savings built up in Portugal, it is easy to have crossed the line without noticing. If that has already happened, start by telling us what you hold abroad.