May I be liable for the fulfilment of the tax obligations of the person I contract for a service rendering?
Yes, you can. Article 43.1.f) of the General Tax Law in Spain stipulates the following:
The persons who contracts or subcontracts the execution of works or the rendering of a service in accordance with their main economic activity, are subsidiary liable for the debt arising from the tax obligations regarding taxes that must be forwarded or amounts that must be withheld from the salary of the employees, self-employed or business entrepreneurs, in the part that corresponds to the works or services object of the contracting or subcontracting.
How can I avoid this liability in Spain?
By asking for a “Certificate for contractors and subcontractors to the person you are contracting or subcontracting. This certificate can only be obtained by the contractor or subcontractor himself.
How can I apply for this certificate?
The payer must apply the certificate to the person whom he is contracting the execution of the works or services to.
The receiver of the payment may apply for the certificate on two ways:
Online, through the website of the Spanish tax office or directly at the tax office itself by means of the form known and 01C in which the personal data of both the payer and the requester must be filled in.
If you are aware that the person you are contracting for the service rendering of his main economic activity is not fulfilling his tax obligations, or you are not aware and you do not request the certificate for contractor or subcontractors, you are liable for his tax debts.
What contents do the Certificates for contractors and subcontractors have?
There are different possibilities. In case the contractor has fulfilled his tax obligations, the certificate will contain a positive evaluation. The certificate will mention that the person you are contracting does not have any outstanding debts in his tax obligations.
Nevertheless, the certificate may have a negative evaluation because there are debts, because certain tax returns were not filed, because he has unregistered, or because he has been convicted for a tax offence, amongst others.
How many Certificates for contractors and subcontractors can be obtained?
Each requester will receive a specific certificate for each payer. Therefore it is necessary to mentioned that personal data of the payer in the certificate.
Conclusion: Always ask for the Certificate for contractors and subcontractors to the person you are contracting the execution of works or the rendering of services.
Do you wish further information about the certificate, do not hesitate to contact the expert accountants and tax advisers of our English-speaking law firm in Marbella. Our English speaking law firm in Spain, “Welex”, is at your disposal for all you fiscal, accounting and commercial issues. Lawyers and accountants under one roof.