If there is one characteristic that is omnipresent in the world of freelancers, it's diversity. Just like those Benetton ads, us freelancers have a far-reaching range of employment sectors, income levels, job stability, and rates of burnout.
Another aspect that makes us all so different is how we see the letters ROI. There are those who quickly identify it as return on investment and move on. But for savvy freelancers dealing across borders in the EU, it means the Register of Intra-community Operators.
Well, we say savvy. There are lots of not-so-savvy freelancers who may find out sooner rather than later that the Register of Intra-community Operators and the intra-community VAT number it gives you aren't something you can brush aside just because you're a local company for local people.
Yes, you might be selling top-notch croissants to your barrio, but what happens when you need to get your name out there? A few Google ads will do the trick. And where is Google based again? Oh yeah, Ireland. In the EU, but certainly not on Spanish territory.
So if you're as hungry as the rest of us to deduct tax on your online ads, you've got no real choice but to register for the ROI and intra-community VAT.
The simple truth is that it's so easy to register that you might as well do it anyway, just to be on the safe side. We know most of our guides are for murky operations and a plethora of forms, but this one really is worth the effort.
What is the Register of Intra-community Operators (ROI)?
Like every good story, let's start at the beginning. ROI stands for Register of Intra-community Operators. It’s a kind of European Union census for all freelancers and companies that deal with clients or providers from other member states. The EU actively wants you to operate within its community, and the ROI is just another way of streamlining your dealings.
The main benefit of the ROI — also known as VIES (VAT Information Exchange System) — is to be able to issue VAT-exempt invoices for intra-community work. However, the system only works when both parties are registered on the ROI, so you can have extra brownie points if you're registering preemptively 👏.
Which countries are on the list of intra-community members?
As anyone who has watched the news even once since 2016 will know, the UK decided to leave the EU, taking official member countries down from 28 to 27. Oddly, even with the roaring successes of Brexit, such as... (note to editor: please provide examples), euroscepticism is actually falling among Europeans. That said, the UK isn't fully out of the EU, and Northern Ireland still makes the list of intra-community members who participate in VIES, at least at the time of publication.
With a bunch of Balkan countries and Ukraine knocking at the door of the world's biggest trading bloc, it's far more likely for the following list to expand than shrink, but enough blabber, let's get to it:
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czechia
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Ireland
- Italy
- Latvia
- Lithuania
- Luxembourg
- Malta
- Netherlands
- Poland
- Portugal
- Romania
- Slovakia
- Slovenia
- Sweden
- Northern Ireland
Do I need to register with the ROI as an expat freelancer in Spain?
There are a lot of similarities between COVID and the Register of Intra-community Operators 😷. Many thought that they could avoid it, that it wouldn't affect them, or that just because it was in Italy, there is no way it could reach Spain. Obviously, hindsight is 20/20, and we're not suggesting you should go to a medium who can tell you how to act in every future situation. However, in our experience, we've seen it's a good idea for everybody to join the ROI because you never know what the future may bring.
That said, there are two main areas where freelancers in Spain really need to register with the ROI:
- If you sell products and services to companies or freelancers in other EU member countries.
- If you receive services from companies or freelancers from other EU countries.
How do you know if your customer or supplier is on the ROI?
Another quirk of this system is that it's the seller's responsibility (that's usually you) to make sure their customer is registered on the VAT Information Exchange System. If not, you won't get the VAT exemption and will instead receive a nasty surprise in your quarterly tax returns.
Luckily, it's easy to check if your client is listed on the ROI. You can do it in just a few seconds on the European Commission's VIES validation page. All you have to do is enter their fiscal details, and you’ll get a yes/no response in seconds.
You can also go the Spanish government route. They have a webpage with practical guides and a tool to check if your Spanish clients are registered with VIES.
How to sign up for the Registry of Intra-community Operators (ROI) as an expat freelancer in Spain
Signing up for the Register of Intra-community Operators as a self-employed person is thankfully very simple. There are two basic methods, one coincides with when you register as a freelancer with the tax authorities, while the other is for when you're already operating in Spain and you need to go international later.
Registering on the ROI at the beginning of your freelance life in Spain
Unless you're going the easy way and using Xolo to register as a freelancer with the tax authorities for free, you'll have to navigate Form 036. Within this form, you will have to request the registration on the ROI by marking box 582 on page five. Then, in box 584, you have to put an approximate date for your first intracommunity operation 🥳.
Registering on the ROI as a fully fledged freelancer in Spain
If you're already registered with the tax authorities, you have to get back to form 036 and check box 130 to show that you're making an amendment. Then, you follow the same steps as above and wait for the tax authorities to make a decision.
Approval of your registration
The tax authorities — La Agencia Tributaria — isn't known for its speed, unless it's chasing up a missed payment. They can take up to three months to study and accept your request, and you might receive visitors from tax inspectors or requests for documentation to prove your intra-community clients actually exist.
If you don't receive a response within three months, that means it's been denied. You can still work with EU clients, but unfortunately you won't be exempt from VAT.
Getting your intra-community VAT number as a freelancer
Don’t be disheartened into thinking the Agencia Tributaria frequently denies VAT numbers. As long as you’re not up to no good, you’ll be allowed to register.
As a result of registering, you’ll get an Intra-community VAT number — your regular NIE with ES as a prefix. That means Spain, if you didn’t get it. Your Intra-community VAT number is the identifier you need to use to be exempt from VAT when dealing with EU customers.
Differences between the Intra-community VAT and the EORI number
Some of you smart cookies may be wondering now what the difference is between your Intra-community VAT number and your EORI — the Economic Operators Registration and Identification number.
Although they fulfil a similar purpose, the EORI, which you can get from the Agencia Tributaria website 😉, is the EU identifier for customs transactions with non-EU countries.
On the other hand, your Intra-community VAT only works on EU to EU transactions.
The Intra-community VAT number in the context of tax and accounting — Form 349
Where would we be without forms? Probably in a happier place, but a far-less organized one.
As you’ll see throughout your journey as a freelancer in Spain, the government loves their forms, and there’s a specific one for pretty much everything you’ll do. For your intra-community operations, take to the stage Form 349.
Form 349 is a mandatory step, although it is only really for informational purposes. This means that it has to match your quarterly and annual VAT forms, 303 and 390 respectively.
Form 349 is unique in that the frequency you have to file it depends on your income. You’ve only got two things to remember:
- If you earn under €50,000 per year, you have to file Form 349 every quarter
- If you earn over €50,000 per year, you have to file Form 349 every month
How to create an intra-community invoice as a freelancer in Spain
When you’re on the Register of Intra-community Operators, there are three differences between your invoices to national clients and to EU clients.
- Instead of your NIE, your invoices to EU clients will have to include your intra-community VAT number.
- In your VAT field, you can leave it blank, as long as your client is registered on the VIES too. If your client doesn’t have an intra-community VAT number, you’ll have to include VAT as you would for national clients.
- For personal income tax, you should leave the section blank, just as you would for any other transaction with foreign customers.
Apart from these differences, your intra-community invoices are exactly the same as your invoices to Spanish clients. Sure, you may have to write them in different languages if your client doesn’t accept English. But that doesn’t mean you’ve got to go back to school. At Xolo, not only can we help you with any billing-related issue, we can even sort out invoices across any languages you need.
Now who could say no to that?
An exception❗Recovering foreign VAT
Of course there’s an exception. There always is, welcome to the real world.
Let’s paint a little picture. Imagine you’re on a business trip in Berlin and, between sordid kebabs and greasy clubs, you have to visit clients.You keep the bills for the meals there — you know your stuff when it comes to tax deductibles. And you’re no mug, so you know you’ve paid German VAT on these invoices, even though you’re registered on the ROI.
The question is: can you recover that input VAT from purchases abroad?
The answer is: Yes. But it’s quite complicated. Bear with us.
- You have until 30 September of the following year to convert your invoices from a certain country into PDF, then present them with Form 360 to the State Tax Administration Agency (AEAT).
- If it’s approved, the AEAT will send the application to the relevant EU member state. Their tax authorities will then contact you to provide you with a tracking number for the procedure and let you know when it is complete. Simple, right?
Just in case you have a business trip coming up, and you want to find out how much tax you will have to pay, here’s an explainer with a handy map that shows you the different levels of VAT in each EU member country.
Xolo, making life easy for intra-community freelancers in Spain
Here’s a bit of tough love. We at Xolo believe there are two ways of looking at the ROI and the intracommunity VAT number:
- Keep your head in the sand, because one more administrative procedure will be your breaking point. You’re sure of it.
- Or you can also embrace reality, fill in a few forms and get ready to expand your business throughout the EU — without getting into trouble with the tax authorities.
Xolo can help you every step of the way.
✔️ Organize your invoices on our super-simple billing platform
✔️ We’ll register you for FREE with social security and the tax authorities — ROI included of course
✔️ Our team of experts will sort out your tax returns so you don’t have to
So if you need a helping hand to spread out into Europe, request a call and Xolo will be delighted to help.
About James
James McKenna has been a freelancer since 2017, working in subtitling, translation, and his main passion — writing. He loves nothing more than falling down a rabbit hole, a habit that has helped him specialize in areas as diverse as biotech, climate change, higher education, and business strategy.
Based in Barcelona, James learned the ropes the hard way, making mistakes that turned into valuable learning experiences. After working hard to establish himself, he is now working smart, and is always on the lookout for ways to streamline his business.