Subscription invoicing in Spain: VAT, recurring payments and the VeriFactu era

Subscription management has established itself as a fundamental business model, but its success largely depends on accurate and compliant invoicing. In Spain, businesses operating under this model must navigate a series of fiscal and operational requirements, from the correct application of Value Added Tax (VAT) to the impending adaptation to the VeriFactu system. Understanding these elements is crucial to avoid penalties and ensure a transparent relationship with both the customer and the tax authority.

VAT in subscriptions: included or added?

One of the first dilemmas when setting the price of a subscription is how to present VAT: does the price shown to the customer already include it, or is it added later? The choice is significant and has legal and consumer implications.

For sales to final consumers (B2C), Spanish and European regulations are clear: the price displayed to the public must be the final price, including all applicable taxes, such as VAT. This means that if a subscription costs 20 euros per month, that amount must already include the corresponding VAT. Showing a price without VAT and adding it at the time of payment is a practice that can cause confusion and is contrary to consumer protection regulations, potentially leading to sanctions.

In the case of business-to-business (B2B) transactions, the situation is more flexible. It is common for prices to be advertised without VAT, clearly specifying that it will be added later. However, clarity is always essential; the customer must know from the outset whether the price is final or if the general 21% VAT rate will be applied, which is the usual tax rate for most digital services in Spain. Reduced rates exist for certain goods and services, but for the vast majority of digital subscriptions, 21% is standard.

For subscriptions to customers located in other European Union countries, if they are B2C digital services, the general rule is to apply the VAT of the customer's country of residence, managed through the One Stop Shop (OSS). For B2B sales within the EU, the reverse charge mechanism applies if the customer has a valid intra-community VAT number. Correct identification of the place of supply of the service is key to VAT application.

Managing recurring invoices for subscriptions

Subscriptions involve periodic payments, and with them, the need to issue recurring invoices. A recurring invoice is a tax document that is automatically and periodically generated (monthly, quarterly, annually, etc.) to document the collection for a continuous service.

Each recurring invoice must contain the same mandatory elements as any other invoice, such as:

• Number and, where applicable, series.
• Date of issue.
• Date of operations, if different from the issue date.
• Full name or company name, NIF (or CIF) and address of the issuer and the recipient.
• Description of operations.
• The total amount, with the applicable tax rate and the tax quota.

Automation is essential for the efficient management of recurring invoicing. Invoicing systems must be capable of generating these invoices, sending them to customers, and recording them for accounting purposes without constant manual intervention. This is especially critical in models with thousands of subscribers, where manual management would be unfeasible and prone to errors.

The integration of the payment gateway with the invoicing system is also crucial. A successful payment can trigger the invoice issuance, while a failed payment may require the temporary suspension of the service and the non-issuance of the invoice until the payment is regularized. To delve deeper into payment mechanisms, you can consult our article on how an online card payment works. The management of refunds and chargebacks also directly impacts accounting and the issuance of corresponding credit notes.

VeriFactu: the new era of invoicing in Spain

Royal Decree 1007/2023, known as the VeriFactu regulation, marks a before and after in invoicing in Spain. Coming into force from July 1, 2025, this law requires all invoicing software programs to guarantee the integrity, conservation, accessibility, readability, traceability, and immutability of invoicing records. Its main objective is the fight against tax fraud and "dual-use software."

For businesses with subscription models, VeriFactu introduces significant changes:

1. Certified software: It will be mandatory to use invoicing software that complies with the technical requirements established by the Tax Agency (AEAT). This software must generate a record of each invoice issued (including recurring ones) and send it electronically to the AEAT almost in real-time.

2. Immutability of records: Once an invoice is issued and its record sent, it cannot be altered. Any modification (e.g., due to a cancellation or a plan change) must be documented through a corrective invoice.

3. QR code and digital fingerprint: Each invoice must incorporate a QR code and a digital fingerprint that allows verification of its authenticity and its registration with the tax authority.

Adapting to VeriFactu for subscription businesses implies a profound review of their invoicing processes. It is not just about issuing invoices, but ensuring that each of them complies with strict technical requirements and communication protocols with the AEAT. This directly affects how tariff changes, renewals, suspensions, and cancellations are managed, which must now be reflected in the system with unalterable records and instant communications. The correct management of these flows will be key for daily operations and legal certainty. You can explore more about this topic in our news section on subscriptions.

Practical conclusion

Subscription invoicing in Spain requires meticulous attention to fiscal and operational details. From the correct indication of VAT in prices to preparing for the implementation of VeriFactu, businesses must ensure that their systems and processes are aligned with regulations. Investing in an invoicing solution that is flexible, automated, and compatible with future VeriFactu requirements is not just a matter of compliance, but a solid foundation for the growth and efficiency of any subscription business. Evaluating available solutions and planning the transition in advance will be key to a future without regulatory surprises. If you wish to explore how a payment platform can integrate with your invoicing system, do not hesitate to request a demo.