In the life of a freelancer or SME in Spain, one of the most frustrating situations is issuing an invoice, declaring and paying the corresponding VAT to the Tax Agency (Hacienda), only for the client to never pay. Fortunately, the law provides a mechanism to ensure you don't lose that money: you can reclaim the VAT from an unpaid invoice.
As your trusted tax advisors, we'll walk you through the process step-by-step, updated for 2026 regulations.
Requirements to Modify the Tax Base and Reclaim VAT
The key to this process lies in modifying the taxable base of the original invoice, as established in Article 80.Four of the Spanish VAT Law. To do so, you must meet several conditions:
1. VAT must have been declared: The invoice must be recorded in your books, and the corresponding VAT must have been paid to the Spanish Tax Agency (AEAT) via Form 303.
2. Time has passed: Six months must have passed since the invoice due date without payment. This period was reduced from one year on January 1, 2023, for freelancers and SMEs with an annual turnover of less than €6,010,121.04. For larger companies, the period remains one year.
3. Formal debt claim: You must be able to prove that you have attempted to collect the debt. The most secure way is through a judicial claim or a notarial request. A "burofax" is also a commonly accepted form of proof.
There is an exception: if your client is declared bankrupt (concurso de acreedores), you can begin the VAT recovery process immediately after the bankruptcy is officially declared, without waiting the six-month period.
Steps to Reclaim VAT from a Bad Debt
If you meet the requirements, the procedure is strict but straightforward:
1. Issue a rectifying invoice (credit note): You have a three-month deadline from the moment the non-payment condition is met (i.e., after 6 months or the bankruptcy declaration) to issue a rectifying invoice. This new invoice must have a separate numbering series, cancel the original tax base and VAT amount (by showing them as negative values), and reference the original unpaid invoice.
2. Send the rectifying invoice to the client: You must ensure your client receives it.
3. Notify the AEAT: You have one month from the date the rectifying invoice is issued to communicate it to the Tax Agency via its online portal (Sede Electrónica). You will need to attach a copy of the rectifying invoice and documents proving the debt claim (the judicial claim or notarial request).
Once completed, you can deduct that VAT amount in the corresponding box on your Form 303 (VAT return) for the quarter in which you issued the rectifying invoice.
The Future: VeriFactu and Electronic Invoicing
Managing these processes will become simpler with the arrival of new invoicing systems. Mandatory electronic invoicing, driven by the "Crea y Crece" Law, and VeriFactu systems will streamline communication with the AEAT. Remember, the deadline for most companies to adapt is January 1, 2027, while for freelancers and micro-enterprises, it will be July 1, 2027. To stay up to date, check our complete guide on VeriFactu 2027: Deadlines for Freelancers in Spain.
Orderly document and invoice management is key not only for daily operations but also for exercising your rights in the face of non-payment. Adapted invoicing software like Fakturia ensures you comply with regulations and makes it easier to issue rectifying invoices and manage your collections—a crucial aspect with the imminent arrival of Electronic Invoicing for Freelancers in Spain.