Globalization has opened up endless opportunities for Spanish companies looking to expand into international markets. However, electronic invoicing to foreign customers can be quite a challenge. Even more so if you are unfamiliar with the tax regulations you must comply with or if you do not have an efficient system in place. In that case, this article is perfect for you. Below, we will tell you everything you need to know about how to invoice foreigners and show you why and how tools such as easyap simplify the process.
If you want to issue an invoice to a foreign company, you must follow certain steps. First, you must collect the customer's details (such as their name or company name, address, and tax identification number) and then issue the invoice using the electronic invoicing system. You must always indicate the foreign currency and mark the transaction as an export. Check all the information and numbering to ensure that there are no errors.
What does invoicing abroad involve?
First and foremost, invoicing abroad means issuing legal documents that support transactions of goods or services to customers in other countries, in accordance with local and international regulations. However, this process involves differences in VAT management, adaptations to international invoice formats and, in many cases, the use of different currencies.
Therefore, in order to comply with tax regulations, it is necessary to adhere to both the regulations in force in Spain and those of the destination country. In our legal system, there are two main regulations that outline the legal framework for these operations:
- VAT Law (Law 37/1992, Articles 69 et seq.)
- Billing regulations (included in Royal Decree 1619/2012).
Can all Spanish companies invoice foreigners?
Another common question regarding invoicing foreigners is whether any organization can do so. The answer is clear: yes, any company legally incorporated in Spain can invoice international clients.
However, to do so, it is essential to meet three requirements:
- Have an intra-Community VAT number. Companies that invoice customers within the European Union must request this number through the intra-Community operator census.
- Comply with the Intra-Community Trade Register (ROI). The ROI guarantees the legality of transactions within the European Union.
- Having systems adapted to international invoicing. Billing abroad requires tools that manage currencies, specific formats, and the correct calculation of VAT.
It should be noted that both the process of obtaining an intra-Community VAT number and finding out what the ROI sets are carried out at the Tax Agency (AEAT). For the third point, you can always rely on easyap. We will explain this later.
How do I invoice a foreign company?
With all of the above clarified, it is time to learn how to invoice a foreign customer. This begins the process of issuing international invoices. It consists of a step-by-step process, although there are some differences depending on whether the foreign customer belongs to an EU country or is from outside the EU:
1- Collect customer information
- EU customers. Verify your intra-community tax ID number in the VIES system.
- Non-EU customers. Ensure that their tax information is valid according to their jurisdiction.
2- Determine the VAT treatment
- Intra-Community transactions. If both companies have an intra-Community VAT number, VAT does not apply (it is self-assessed at the destination).
- Non-EU transactions. These transactions are generally exempt from VAT, but may be subject to customs duties or local taxes in the receiving country. Therefore, please check this aspect.
3- Create the invoice
Just as invoices in Spain must contain certain invoicing details by law, for foreign customers they must also include the following:
- Complete details of both parties (issuing company and customer).
- Tax identification number (TIN).
- Detailed description of the goods or services involved in the transaction.
- Currency used, exchange rate (if applicable), and a breakdown of taxes.
- Express mention of the applicable regulations, such as "Intra-Community transaction exempt under Law 37/1992, Article 25."
4- Send the invoice
Finally, it is time to send the invoice, either by traditional or electronic means. However, the use of electronic invoicing software is becoming increasingly common, both here and in the rest of the world. This method guarantees traceability and regulatory compliance. Not only that, but in many countries, such as Spain, it is already mandatory by law (or will be soon).
Should I charge VAT to a foreign customer?
Also, as mentioned above, it is important to know whether transactions with foreigners are subject to VAT or not. Tax treatment depends on the destination and, again, differs depending on whether it is within or outside the EU:
- Within the European Union. The transaction is exempt from VAT if both parties have an intra-Community VAT number. If the customer does not have one, Spanish VAT applies.
- Outside the European Union. Exports are exempt from VAT under Spanish law. However, local tariffs and taxes may apply in the customer's country.
Why is it so important to manage billing to foreigners correctly?
What has been proven is that technology in this area is also a strategic ally. In fact, having an efficient system for your electronic invoicing helps you comply with regulations, which has advantages such as these:
- Guaranteed legal compliance. You avoid penalties for errors in VAT management or for failing to comply with international laws.
- Improved customer relations. Clear and accurate invoices build trust and loyalty among international customers.
- Optimization of financial processes. Automating billing allows you to devote more time and resources to activities of greater strategic value.
- Access to new markets. Having a system that manages multiple currencies and regulations makes it easier for you to enter foreign markets.
Common challenges when invoicing abroad
As you can imagine, invoicing foreign customers involves difficulties and risks. At easyap, we know this from our experience with companies around the world. That's why we would say that there are common challenges when invoicing services provided in Spain to a foreign company. Mainly:
- Errors in VAT management. Applying VAT incorrectly can result in various penalties.
- Lack of knowledge of local regulations. Each country has its own specific requirements regarding the format and content of invoices.
- Language or currency issues. Issuing invoices in languages that the customer does not understand or without considering the current exchange rate often causes operational problems.
The 8 benefits of easyap for simplifying international invoicing
In this scenario, an advanced solution such as those we design at easyap is a great solution. Our systems are developed for companies seeking efficient and secure management of their international operations. We also offer eight interesting benefits.
1. Guaranteed tax compliance
At easyap , we take into account the regulations of the VAT Law and the Invoicing Regulations. Therefore, invoices comply with legislation both in Spain and abroad.
2. Advanced currency management
You can issue your invoices in any currency, perform automatic conversions to euros, and adjust exchange rates according to the market.
3. VAT automation
Our software automatically calculates whether VAT applies or not, based on the customer's location and the type of transaction.
4. Adaptation to international regulations
The system includes specific billing formats for both the EU and non-EU countries. This way, you run fewer legal risks.
5. Intuitive interface and ERP integration
Ours is an intuitive and easy-to-use software. It also integrates seamlessly with all types of business management systems.
6. Auditing and traceability
The easyap solution provides you with a detailed history of all the invoices you issue. A real advantage when it comes to audits.
7. Fewer human errors
Automation prevents common errors, such as incomplete data or incorrect tax calculations.
8. Specialized support
We offer you personalized assistance to help you resolve any issues in real time.
Knowing how to invoice a foreign company is important. Ultimately, with us, companies simplify the process of invoicing foreign customers in Spain and strengthen their presence in global markets. Contact us and discover how easyap optimizes this process and ensures your success abroad.
