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Mastering Spanish IVA: Understanding the Modelo 303 Tax Form

Few things scare freelancers in Spain as much as receiving a letter from the Tax Office. 

But there’s something even worse: forgetting the quarterly VAT payment via Modelo 303.

That’s why in this article, we’ll walk you through everything you need to know about quarterly VAT payments, what Modelo 303 entails exactly, who’s required to submit it, and the simplest, fastest way to get it done.

Let’s dive in!

Modelo 303: What is it?

Modelo 303, known as the quarterly VAT model, is an essential document for every freelancer or business owner operating in Spain under the Value Added Tax (VAT) system.

This form allows you to make fractional VAT payments, meaning every quarter, you’ll need to settle the difference between the VAT you’ve collected from your sales and the VAT you’ve paid on your purchases and business expenses.

Who Needs to Make Quarterly VAT Payments?

Any professional, freelancer, or business owner engaged in economic activities subject to Spanish IVA or VAT must submit Modelo 303, regardless of the declaration’s outcome (even if you’re due a refund, you still have to file it).

Only certain services are exempt from Spanish IVA, such as:

• Medical and healthcare services.
• Education and training: private tutors and those working in public and private institutions.
• Insurance and financial operations mediation.
• Real estate.
• Postal services.
• Social services: care for disadvantaged groups.
• Certain members of the Spanish army assigned to special missions or members of NATO.

In these cases, it’s not necessary to complete or submit Modelo 303 since VAT is treated differently.

When to Make Quarterly VAT Payments

Since it’s a quarterly declaration, you’ll need to submit it on the following dates:

• First quarter: April 1st to April 20th.
• Second quarter: July 1st to July 20th.
• Third quarter: October 1st to October 20th.
• Fourth quarter: January 1st to January 30th.

If your declaration shows a positive balance, meaning you owe money to the Tax Office, you’ll have five fewer days to make the payment if it’s set up for direct debit from your bank account.

How is the Tax Calculated in Modelo 303?

The total amount you must pay in Modelo 303 is calculated by subtracting the VAT collected from the VAT paid.

Quarterly VAT Payment = VAT Collected – VAT Paid

• VAT collected (IVA repercutido) refers to what you add to your sales invoices—what your customers pay for your goods or services. O
• On the other hand, VAT paid (IVA soportado), is what you incur when purchasing goods or services for your business, as listed on your purchase invoices.

If the result is positive, you owe money to the Tax Office. If it’s negative, congratulations—the Tax Office owes you! And if it’s zero, neither party has to pay anything.

For example, let’s say you sell a consulting service for 1,000 euros, and the VAT rate is 21%, so you collect 210 euros in VAT (VAT collected). The total invoice amount would be 1,210 euros.

On the other hand, let’s say you invest 5,000 euros in improving your online platform and pay 1,050 euros in VAT—that’s your VAT paid.

Therefore, VAT collected (210€) – VAT paid (1,050€) = -840€.

In this case, since the result is negative, the Tax Office owes you 840€.

Frequently Asked Questions about Quarterly VAT Payments and Modelo 303

What information should I include in Modelo 303?

You should include information about the VAT collected (income) and the VAT paid (expenses) in the corresponding period.

To complete it, you’ll need to separate the information between the taxable base and the value of the VAT, and justify the income and expenses related to the economic activity with the corresponding invoices.

Can I modify a declaration submitted through Modelo 303?

Yes, it’s possible.

According to the Tax Agency, rectifying a declaration submitted through Modelo 303 can be done within the voluntary period (the quarterly deadlines for submitting the modelos) or in the subsequent quarterly declarations.

If the voluntary period has ended, you can make the rectification in the following quarterly declarations, within a period of four years, which is the statute of limitations for the tax.

What are the consequences of not submitting Modelo 303 on time?

According to the General Tax Law, the penalty for late submission of VAT is a fixed fine of 200 euros for quarterly self-assessments not submitted or sent late.

Which expenses are deductible in Modelo 303?

In Modelo 303 of VAT, deductible expenses include those related to business activity (e.g., software or programs you need for your work, services of professionals like lawyers, etc).

To justify the expenses, you’ll need the corresponding invoices; receipts alone are not enough.

How can I submit Modelo 303 electronically?

You have to follow these steps:

1. Access the Electronic Office of the Tax Agency through the link “File and consult returns by Form” and selecting Modelo 303 of the corresponding year.
2. Use your digital certificate with the electronic ID or Cl@ve PIN to access.
3. Complete the declaration with the necessary information, separating the taxable base and the value of the VAT, and justify the income and expenses related to the economic activity with the corresponding invoices.

What should I do if I make a mistake in the Modelo 303 declaration?

If you make a mistake in the Modelo 303 declaration, you can correct it by submitting a complementary or substitute declaration.

The complementary declaration includes operations that appeared in the initial declaration, while the substitute corrects errors in an already submitted declaration.

As mentioned, there are deadlines to rectify these errors, and failure to meet them can result in penalties.

What if I don’t have any economic activity during the Modelo 303 declaration period?

f you haven’t had any economic activity during the Modelo 303 declaration period, you still have the obligation to submit it. As we saw at the beginning, if you’re required to submit this form, you must do so regardless of the declaration outcome.

The only case where you don’t have to submit Modelo 303 is if your activity is exempt from VAT.

How is the VAT refund processed through Modelo 303?

If the declaration result is negative, you can request the VAT refund.

The deadline to request it is the last quarter of VAT, i.e., until January 30th.

If you don’t request it within this period, you can do so in the next closing of the following annual exercise (i.e., until January 30th of the following year) for up to 4 subsequent exercises. For example, if you haven’t requested the refund during the year 2024, you would have until January 30th, 2028, to request it.

What if I disagree with the Modelo 303 result?

If you disagree with the Modelo 303 result, you can submit a complementary or substitute declaration to correct any errors or omissions, just as in the case of making a mistake in your declaration.

The Fastest and Easiest Way to Submit Modelo 303

Although we’ve tried to simplify the explanation of Modelo 303 to the fullest, submitting it is complex if you’re not a professional or expert in the field, as it involves calculations and interpreting tax regulations.

Furthermore, it’s a task that can consume a lot of your time, which you could spend on other tasks you enjoy more. And on top of that, there’s a high likelihood of making mistakes if you’re not a professional in the field, which ultimately results in penalties from the Tax Office.

Fortunately, nowadays, there are programs and software that allow you to submit your Modelo 303 on time, without errors, and with minimal effort.

With Companio One Spain, you simply have to upload your sales and purchase invoices for the quarter, and we’ll submit the modelo 303 for you on time, without you having to worry about anything else.

Furthermore, registering as a freelancer (alta de autónomos) is free.

If you’re looking for an online service for freelancers to assist you with forms submission, Companio One offers much more than that. Find out how we can help in this link.