The intra-EU operators register is not optional
To buy from or sell to a Portuguese company without VAT you have to be entered on the ROI, the Spanish register of intra-EU operators, with your number validated on the European VIES database. The application is made through Modelo 036, the census declaration, and it is not automatic: the administration checks first, and until you appear on the European database your Portuguese supplier will invoice you with Portuguese tax, which you will not be able to deduct here.
The practical warning is about sequence. You apply before you start trading, not once invoices have already gone out. Re-issuing invoices and asking a foreign supplier for credit notes is work that a week's foresight would have avoided. The steps are in registering on the ROI and VIES.
Goods and services are not located the same way
Selling goods that cross the border is one thing; supplying a service is another. On a supply of goods to a business in another member state, the exemption requires a valid number, evidence that the goods left Spain and a report on Modelo 349, the recapitulative statement of intra-EU transactions. On services between businesses, the general rule locates the transaction in the customer's country: you invoice without Spanish VAT under the reverse charge, and that also goes on Modelo 349.
There are exceptions that are forgotten regularly, and in Vigo they carry weight: services connected with immovable property are located where the property is, regardless of where the customer is. An installation, a repair or building work on the other side of the Miño does not follow the general rule.
The distinction is not academic. It decides which evidence you have to keep — a transport document for goods, the contract and proof of the customer's business status for services — and it decides which box of the VAT return the transaction lands in. A business that does both, as many here do, needs the two circuits running side by side rather than one of them applied to everything.
A retailer under recargo de equivalencia, the simplified VAT regime for shops, files no Modelo 303, but if they buy from a Portuguese supplier they have to self-assess the tax on that intra-EU acquisition, and they do it through Modelo 309, a non-periodic VAT return, on top of registering on the ROI and filing Modelo 349. It is among the commonest errors in the shops of the city, because nobody expects a new return after years of filing no VAT at all.
Working on one side and living on the other
Between Vigo and northern Portugal a great many people cross the border daily. Who taxes that salary depends on tax residence and on what the treaty between Spain and Portugal says, which contains rules of its own for workers who move from one country to the other. There is no single answer and we are not going to improvise one: the text of the applicable treaty is read against the actual facts, and how many days are worked in each place is looked at, because that is where it is decided.
What is common to every case is the evidence: the contract, the days worked in each territory, the payslips and the certificate of tax residence from the relevant country. Without those, an argument with either administration is lost for want of paperwork rather than for want of a case.
The certificate is also what keeps both administrations from taxing the same salary while the point is being settled, which is why it is requested early rather than once a letter has arrived.
Who writes to us from Vigo
| Business | What has to be set up |
|---|---|
| A component workshop invoicing a Portuguese factory | ROI registration, validating the customer and Modelo 349 reconciled with Modelo 303 |
| A shop under recargo de equivalencia buying abroad | Modelo 309 and a registration they never applied for |
| An installer doing work in Portugal | The rule on services connected with property and where the VAT is due |
| A worker crossing the border every day | Tax residence, the treaty and proof of days in each country |
| Self-employed selling online to EU consumers | The distance-sales threshold and the one-stop shop |
How we work with clients in Vigo
By setting the circuit up once: what is checked before each invoice, which document has to be kept for each shipment, and how Modelo 349 is reconciled with Modelo 303 each quarter. Once that is done it stops being a problem and becomes routine.
The international side lives in invoicing abroad from Spain, and we have the conversation in Spanish, English or French as required. If your supplier or your customer has to understand something we write, it is written in their language. Where a treaty question genuinely has two readings, we tell you so rather than picking the convenient one and calling it settled.
A Vigo workshop with clients on both banks of the Miño: its Modelo 303, line by line
An industrial machinery repair workshop on the Balaídos industrial estate works for factories in the area and for a plant in northern Portugal, and buys parts from a distributor in Braga. Any given quarter:
| Transaction | Net amount | VAT on the 303 | On Modelo 349? |
|---|---|---|---|
| Repairs for clients in Vigo | 20,000 € | +4,200 € charged | No |
| Repair of machinery at the Portuguese plant | 30,000 € | No Spanish VAT: located in Portugal and declared by the client | Yes, as a service supplied |
| Parts bought in Braga | 8,000 € | +1,680 € self-charged and −1,680 € deducted | Yes, as an acquisition |
| Purchases from Spanish suppliers | 6,000 € | −1,260 € input VAT | No |
| Result for the quarter | 2,940 € to pay |
The purchase in Braga costs no VAT, because it is charged and deducted in the same 303, but it has to appear: if it is missing, the Portuguese supplier's report finds no match in yours. And the repair for the Portuguese plant goes without VAT because the client is a business and the machinery is movable property; if instead of repairing a machine it were a fixed installation in the building, the real-estate rule would change the result. The table of rules is in where each service is taxed.
The calendar of a Vigo company trading with Portugal
| Form | Deadline | What to watch |
|---|---|---|
| 303 and 349 | 1 to 20 April, July and October; the fourth quarter until 30 January | That they match each other |
| Monthly 349 | 1 to 20 of each month | It becomes monthly when intra-EU transactions in a quarter exceed 50,000 € |
| 390 | January | That it adds up the four 303s |
| 347 | February | Only transactions with Spanish parties; intra-EU ones already go on the 349 |
A warning about the last row of the first table. If instead of repairing a machine the workshop fits a fixed installation in the Portuguese building, the service is deemed supplied where the property is, and the tax is then Portuguese. Depending on what the rules there provide for that kind of work, either the client declares it under the reverse charge or the Vigo workshop has to declare it in Portugal, with its own number there. It is checked with the client before quoting, because it changes the price.
And one last cross-check that gets forgotten: the Portuguese client reports in its own country what it bought from you under your number, and the Portuguese administration passes that on to the Spanish one. If your 349 shows a different figure, or a different quarter, the gap appears even when both invoices are correct. It is reconciled with the client at the close of each period, not a year later.
Everything above applies between businesses. If you repair the machine of a private Portuguese customer, the general rule sends you back to Spanish VAT, with its exceptions. And if you make distance sales of goods to private customers in other EU member states above 10,000 € a year in total, from that point the VAT of the buyer's country applies, declared through the one-stop shop (OSS). In border trade that threshold is crossed without anyone noticing. It is in the one-stop shop, and the engagement in the form for the self-employed with clients abroad.