One of the most difficult aspects of doing business in Spain is that no one pays you on time. Collecting bills is a long and arduous process, where even your “good” customers can take 90 days or longer to pay their invoices. If you ask them why, they usual answer that their suppliers take that long to pay their bills, so effectively they are just passing along the problem to you. If you dare to add interest to your bill (which you are legally entitled to in Spain), you will get howls of pain from your customers who will swear to never do business with you again.
Could it get worse than this? Yes, well it turns out that the moment you send a bill to your customer, you are required to pay your 21% (or whatever) VAT. (Sadly, this applies even if your customer is the government itself). If your customer doesn’t end up paying, you get to follow this convoluted procedure to get a refund (which takes at least a year).
The European Union told Spain last year that this was unfair and conflicted with the way that VAT is assessed everywhere else. Rajoy even promised to fix this as part of his campaign. In June this year the CIU finally forced the PP to bring the matter to a vote. The PP claimed there were “technical difficulties” in implementing the changes, so they voted the whole thing down.
(Although to be fair, from what I’ve heard, it would actually be technically difficult since it would require major accounting changes to when the taxable event happens, and there’s no infrastructure in place to do this. Of course, if the changes involve tax cheats being able to escape prosecution by paying a small percentage of their ill gotten gains, then there’s no technical difficulties.)
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