In Spain, businesses and self-employed individuals must comply with various tax reporting obligations. One of these is Modelo 347, an annual informative declaration required by the Spanish Tax Agency (Agencia Tributaria). This form is used to report transactions with third parties that exceed a specific threshold, ensuring greater transparency and preventing tax fraud.
What Is Modelo 347?
Modelo 347 is an informative tax return that Spanish businesses and self-employed individuals must submit if they conduct transactions with a single client or supplier exceeding €3,005.06 (including VAT) within a fiscal year. The primary purpose of this form is to provide the tax authorities with details about substantial business relationships, allowing them to cross-check information reported by other taxpayers.
Who Must File Modelo 347?
The obligation to file Modelo 347 applies to:
- Businesses and self-employed professionals operating in Spain.
- Entities and associations that carry out economic activities.
- Public administrations engaged in significant transactions with suppliers or clients.
However, some entities are exempt from filing, including:
- Those using the SII (Immediate Supply of Information System) for VAT purposes.
- Businesses and professionals not exceeding the €3,005.06 threshold per transaction.
- Individuals under the simplified VAT regime, except for certain operations.
What Needs to Be Reported?
The declaration requires a detailed report of the total amount of transactions with each third party exceeding €3,005.06.
Each transaction must be reported quarterly, specifying the amounts related to each period, even though the declaration itself is submitted annually.
Transactions exceeding the threshold but already reported under other annual obligations should not be included in this form. This applies to payments to professionals and rental transactions subject to IRPF withholdings, which are already declared in Modelo 190 and Modelo 180, both submitted in January.
A Good Opportunity to Cross-Check Transactions
Filing Modelo 347 is not only a legal obligation but also a valuable opportunity for businesses to cross-check information with their suppliers and clients. Ensuring that all transactions match helps avoid discrepancies that could trigger tax inspections or administrative issues. Additionally, this process serves as a good year-end closure procedure, as it allows businesses to detect pending or missing transactions, ensuring that all records are accurate before finalising the fiscal year.
When and How to Submit?
Modelo 347 must be submitted electronically via the Agencia Tributaria’s website. The deadline is usually 28 February of the year following the reported fiscal period.
Consequences of Non-Compliance
Failure to submit Modelo 347, or providing incorrect information, can result in significant penalties, including fines based on the number of incorrect or missing records.
Final Comment
Modelo 347 plays a crucial role in ensuring tax compliance in Spain. Businesses and self-employed individuals should maintain accurate records throughout the year to facilitate timely and correct submission. Consulting a tax professional can help avoid errors and ensure full compliance with Spanish tax regulations.
