Where a design service is treated as supplied
For a designer, a pattern-making studio, a consultant or a developer, the general rule in dealings between businesses is that the service is located where the customer is established. If your client is a German company, the service is located in Germany: you invoice without Spanish VAT and it is the client who accounts for the tax there under the reverse charge, a circumstance that must be stated on the invoice.
If the client is a private individual in the European Union, the general rule flips and the service is located where you are, with Spanish VAT, unless it falls into one of the cases with a special rule — electronically supplied services among them — which have their own treatment and their own filing channel. The first question on any international invoice is not how much you are charging: it is what your client is and where.
The ROI and the 349 for someone selling services
To invoice that German company without VAT 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. Remember that the simplified Modelo 037 disappeared with Orden HAC/1526/2024, with effect from 3 February 2025: today everything goes through the 036. Registration is not automatic and the authorities check before granting it, so it is worth applying with time to spare rather than in the week you have to issue the invoice.
Intra-EU supplies of services are then reported on Modelo 349, the recapitulative statement of intra-EU transactions, at whatever frequency your volume requires. And it is worth checking your client's number on VIES, the EU-wide database where those numbers are verified, every time you invoice, keeping the result with its date: that is the proof you acted correctly if the number later turns out to have been deregistered. We handle it in invoicing abroad from Spain.
Registration carries a consequence people forget: it is not a label you obtain once and put away. While you are on the register every intra-EU transaction has to reach the 349, including the ones coming in rather than going out, and your number can be checked by your customers exactly as you check theirs.
Many professionals whose clients are all Spanish end up having to register anyway. The reason is the commission: if you are paid through a platform established in another member state, that commission is a service you receive, it is located in Spain and you self-account for it under the reverse charge, reporting it in your 303 and your 349. It is the route by which most people discover they have spent two years failing an obligation they never knew they had.
A client outside the European Union
With an American, British or Swiss client the mechanics look simpler: the service is treated as supplied outside Spain, no Spanish VAT is charged, and it does not go on the 349, which covers intra-EU transactions only. But there are two wrinkles worth not overlooking. The first is the use and enjoyment rule, which can pull the taxation of certain services back to Spain where they are effectively used here. The second is that in several countries the client withholds tax at source on particular payments, and that withholding is recovered — if it is recovered — under the treaty, with a Spanish tax residence certificate in hand. It is in the comparison invoicing inside or outside the EU.
Who writes to us from Terrassa
| Who | What changes their invoice |
|---|---|
| Designer with clients in Germany and Italy | Place of supply, the ROI, the reverse-charge wording and Modelo 349 |
| Textile studio working for brands abroad | Whether what is delivered is a service or goods, because they are not taxed alike |
| Professional paid through a foreign platform | The commission self-accounted under the reverse charge, even with Spanish clients only |
| Developer with a client in the United States | Withholding at source, the treaty and the tax residence certificate |
| Newly self-employed starting to invoice abroad | Correct tax registration from the start, because fixing it later costs more |
Working with Terrassa, remotely
The first thing we ask for is not the bookkeeping: it is three invoices you have issued and three you have received. In them you can see straight away whether the place of supply is correctly resolved, whether the compulsory wording is missing and whether there are foreign commissions that have never been self-accounted for. From there, quarterly returns on time and a fixed fee, remotely and with no travelling.
We work in Spanish, English and French. When a matter calls for an adviser in the client's country, we say so and coordinate with whoever you appoint: we do not offer an international network we do not have.
The first year of a Terrassa designer with clients at home and abroad
A textile designer who registers this year under a professional activity code. She invoices 12,000 € to a Spanish brand, 18,000 € to a German company and 3,000 € to private clients here. She has 6,000 € of costs and pays the new self-employed flat rate of 86 € a month. Her year looks like this:
| Client | Base | VAT | Withholding |
|---|---|---|---|
| Spanish brand | 12,000 € | 2,520 € | 840 €, at 7 % because it is her first year |
| German company | 18,000 € | No: reverse charge, and it goes on the 349 | No |
| Spanish private clients | 3,000 € | 630 € | No |
| Total | 33,000 € | 3,150 € | 840 € |
Net income: 33,000 € less 6,000 € of costs and 1,032 € of social security, 25,968 €. Only 36 % of her income carries withholding, so she is not spared Modelo 130, the quarterly prepayment: that only happens when at least 70 % is withheld. Her prepayments for the year add up to 20 % of net income less what was withheld, 4,353.60 €. The 7 % does not apply by itself: the client has to be told in writing, and it is valid for the year of registration and the two following. If your activity code were a business one rather than a professional one, there would be no withholding, which is why it is worth choosing carefully: IAE activity codes, how to choose yours.
For VAT, over the year she pays in the 3,150 € charged less the VAT on her costs, about 840 € if two thirds of them carry VAT: 2,310 €. And in the June return the 840 € withheld and the 4,353.60 € of prepayments are subtracted, so whatever is left to pay or reclaim will already be small. In the quarter she buys expensive equipment, the 303 may come out as a balance to carry forward. All this on modest turnover, which shows that in Terrassa the complexity comes not from the size of the business but from the client's country.
The calendar of a Terrassa freelancer invoicing Europe
| When | What |
|---|---|
| Before the first invoice | Modelo 036 with the activity and box 582 for the ROI, the register of EU intra-community operators; registration as self-employed |
| 1 to 20 April, July and October | 303, 130 and 349 for the quarter |
| By 30 January | 303, 130 and 349 for the fourth quarter |
| January | 390, the annual VAT summary |
| April to June | Income tax return, with withholding and prepayments subtracted |
Modelo 349 is the quarterly list of intra-EU transactions. If you are about to start, the form is let us register you properly first time.
What almost nobody in Terrassa asks when registering: the 86 € a month covers the first twelve months. In the second year it continues only if net income stays below the minimum wage, and it has to be requested; otherwise, from month thirteen you pay the contribution matching your real income, which for this designer is considerably more. And to qualify for the flat rate you must not have been self-employed in the two previous years, or three if you have had it before. It is set out in the flat rate, who qualifies.