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Taxes
Dropea Limited
Level 3 (Suite No. 3001),Tower Business Centre, Tower Street
Swatar, BKR 4013
Birkirkara, Malta
VAT: MT29745525
To clarify the indirect taxation arising from the acquisition of goods and services by dropshippers operating in the Spanish market through the DROPEA platform, we address some of the most frequently asked questions below.
These responses are intended solely for informational purposes and in no way replace personalized tax advice, which each taxpayer must seek at their own responsibility.
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What does DROPEA invoice?
DROPEA neither buys nor sells merchandise.
DROPEA (legally known as Dropea Limited) is an entity established and tax-resident in Malta. It provides its clients with services related to brokerage, transportation, and logistics.
Therefore, the invoice issued by DROPEA to its clients will be for the provision of its services, not for the delivery of goods.
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Does the invoice I receive from DROPEA include VAT?
Given that DROPEA’s clients are considered businesses or professionals, the invoice issued by DROPEA does not include VAT (unless the client is based in Malta, in which case the invoice would include Maltese VAT).
If the recipient of DROPEA’s invoice is established within the EU VAT area, they will be the VAT liable party through the reverse charge mechanism, and must “self-account” for VAT on the intra-community acquisition of the service provided by DROPEA.
Clients established in the European Union (excluding Malta and EU regions excluded from the VAT Directive) must provide a valid VAT number to verify their status as a business or professional.
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Does my supplier’s invoice include VAT?
In cases where the merchandise purchased from the supplier is stored within the Spanish VAT territory (i.e., mainland Spain, excluding the Canary Islands, Ceuta, and Melilla) and the order is delivered within the Spanish VAT territory, the sale made by the supplier to the dropshipper will be subject to Spanish VAT, with the following specifics:
Supplier established in: Does the invoice include Spanish VAT? Reverse charge mechanism for Spanish VAT Spanish VAT Territory Yes No other No Yes When the supplier is not established in the Spanish VAT territory, the dropshipper must self-account for Spanish VAT through the reverse charge mechanism.
If, on the other hand, the order is shipped from the Spanish VAT territory to another EU member state where the final consumer is located, this constitutes an intra-community operation. The fiscal treatment will depend on the VAT Number assignment in the member state where the dropshipper is registered:
Dropshipper’s VAT Number Supplier Established In: Does the invoice include Spanish
VAT?Reverse charge mechanism for Spanish VAT Spain Spanish VAT Area Yes No Spain Outside Spanish VAT Area No Yes Other EU Member State N/A No. Exempt Transaction No Without VAT Number Spanish VAT Area Yes No Without VAT Number Outside Spanish VAT Area No Yes This taxation is separate from the VAT on intra-community acquisition that the dropshipper may incur in the member state where the order is consumed.
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If I am a retailer, does the supplier’s invoice include the special VAT regime for retailers (recargo de equivalencia)?
In the case of dropshippers to whom the special VAT regime for retailers (recargo de equivalencia) applies, they must inform their supplier. The supplier will also verify it on the AEAT website.
In cases where the invoice must include Spanish VAT because the supplier is established in the Spanish VAT territory, they will also apply the corresponding special VAT regime for retailers (recargo de equivalencia).
If the retailer needs to self-account for the VAT on the product acquired from the supplier, they must also pay the corresponding special VAT regime for retailers (recargo de equivalencia) using Form 309 (non-periodic tax return).
The applicable rates for the special VAT regime for retailers (recargo de equivalencia) are as follows:
Items with VAT Rates Special VAT Regime for Retailers (Recargo de Equivalencia) Rates 21% 5,20% 10% 1,40% 5% 0,62% 4% 0,50% 0% 0%
- Do I need to issue invoices with VAT? DROPEA is not responsible or liable for the dropshipper’s tax obligations. Dropshippers must seek personalized tax advice to understand the taxation of their operations.
