Invoicing subscriptions in Spain: VAT, renewals, and VeriFactu

Setting up a subscription is easy until the second month. That is when failed renewals, mid-period plan changes, customers in other EU countries, and the obligation to issue an invoice for every charge all show up. This article covers the decisions worth making before writing any code.

The price: tax-inclusive or not

The first decision is not technical. Selling to consumers in Spain, the advertised price must be the final, tax-inclusive price; selling business to business, it is common to show it without VAT and add it on the invoice. The Spanish standard rate is 21%, with reduced rates for certain goods and services.

Getting this wrong forces you to rewrite the whole catalogue later, because the stored amount no longer means the same thing. Always store, alongside the amount, whether it is tax-inclusive or not: it is part of the price, not a display preference.

Customers in other countries

For digital services sold to consumers in other EU countries, the applicable VAT is usually the customer's country rate, and a one-stop shop exists to declare it without registering in every member state. For business-to-business sales inside the EU with a valid VAT number, the transaction usually carries no output VAT and applies the reverse charge.

This is not a decision to leave until the end: it determines what you must ask the customer at checkout — country, VAT number — and what you store with each payment. Check your specific case with your tax adviser.

One invoice per renewal

Every recurring charge produces its own invoice, sequentially numbered with no gaps. Cancelling an issued invoice is not deleting it: you issue a corrective one. And invoices must be kept for the period the rules require, accessible and legible.

The detail most often forgotten: the invoice date and the payment date need not match when a charge is retried days later. Store both.

VeriFactu, in one sentence

Spanish rules on invoicing software require the program that issues invoices to produce one record per invoice, chained to the previous one by a digital fingerprint, tamper-evident, with a QR code on the invoice and, in the submission mode, transmission of the record to the tax agency. The goal is that deleting or altering an invoice after the fact becomes detectable.

The start dates have been adjusted more than once and depend on the type of taxpayer, so confirm the date that applies to you before planning. What does not change is the design consequence: invoicing stops being a PDF you generate whenever you like and becomes a record with ordering, a fingerprint, and traceability. If you sell subscriptions, that means the system that charges and the system that invoices have to talk to each other reliably, not through a manual month-end process.

Renewals that fail

Between 5% and 15% of renewals fail in any subscription business, almost always because of an expired card, insufficient funds, or a transaction blocked by the bank. The retry plan matters more than it looks:

• Retry with increasing gaps, not five times on the same day.
• Warn the customer before the renewal and after the failure, with a link to update the card.
• Tell a temporary failure from a permanent one: "insufficient funds" is not "card cancelled".
• Decide what happens to access in the meantime: immediate cut-off, grace period, or plan downgrade.

On automatic renewals, strong authentication also works differently from the first payment: merchant-initiated recurring charges usually fall under an exemption, but the first charge — the one that authorises the series — does go through full authentication. That first payment's journey is explained in what actually happens inside a card payment.

Plan changes and proration

Upgrading mid-month, downgrading, pausing, or cancelling are operations with tax consequences, not just commercial ones. Decide up front whether you prorate, and write it into your terms: it is one of the most frequent causes of complaints and of avoidable chargebacks.

In short

Treat a subscription as two synchronised clocks: the charging one and the invoicing one. Amounts and taxes must be decided on the server, every renewal must leave an invoice, and the system must know what to do when a charge fails. You can see the fee breakdown on a specific amount on the pricing page, what a plan catalogue looks like in the demo, and the rest of the articles on subscriptions and invoicing.