What the Spanish Tax Office Knows About Your Business

Your tax return is rarely the first thing the Spanish Tax Agency learns about your business. A customer may have reported a withholding. A supplier or client may have included your transactions in an information return. A bank or payment provider may have a separate reporting duty. If your business uses the Immediate Supply of Information system, commonly called SII, invoice-record data has been arriving throughout the year.

That does not mean the Agencia Estatal de Administración Tributaria (AEAT) has a flawless duplicate of your accounts or watches every bank movement. The more accurate picture is less dramatic and more useful: several data streams reach AEAT at different times, from different parties, under different rules. The administration can compare information already in its possession with a return, and Article 131 of the General Tax Law expressly allows a data-verification procedure where declared data does not coincide with other returns or information held by the administration. General Tax Law, Article 131

AEAT can hold tax-relevant information about a business before that business files a particular return because taxpayers, customers, payers, financial institutions and other parties have separate reporting duties. Article 93 establishes the general duty to provide tax-relevant data arising from a person’s own obligations or from economic, professional or financial relationships with others. The exact information still depends on the return, legal duty or individual request involved. General Tax Law, Article 93

For a freelancer or small company, “How much does Hacienda know?” is too broad to be useful. Ask which external records can describe a transaction and whether they agree with the books. That can be checked before a filing deadline, while the invoice, payment and correspondence are still easy to find.

Think in sources, not in an all-seeing database

The phrase “Hacienda crosses data” compresses several legal and technical processes into three words. Sometimes the source is the business itself, as with an SII VAT record. Sometimes it is the other side of a transaction, as with a payer’s annual withholding return. Sometimes a financial institution reports a defined set of account or payment information. During a tax procedure, AEAT may also request evidence from the taxpayer or a third party.

These routes are not interchangeable. They differ in five ways:

who reports the data;
which taxpayers and transactions are covered;
whether the report is periodic, annual or requested for a specific procedure;
whether it contains an invoice record, an aggregate, a balance or a payment amount; and
what the figure can prove without the supporting documents.

A successfully submitted return is not, by itself, a reconciled tax position. It does not establish that every source document, counterparty report and accounting classification agrees.

The inverse mistake is equally risky. A business outside SII might conclude that AEAT has no transaction-level information until an annual tax return is filed. That ignores withholding returns, Form 347 where applicable and defined financial information returns. Not all will apply, but “not in SII” does not mean “invisible”.

SII: detailed VAT records, not copies of every invoice

SII is the clearest example of information arriving before an annual set of accounts is complete. AEAT describes it as a way of keeping VAT ledgers through its electronic office by supplying invoice records on a near-immediate basis. It is compulsory for specified taxpayers with monthly VAT periods, including REDEME participants, large businesses and VAT groups, and other taxpayers may opt in. The official scope contains additional cases and exceptions, so a business should confirm its own status rather than infer it from size alone. AEAT: SII general questions

Under SII, covered taxpayers send specified VAT invoice-record fields to AEAT electronically; they do not send the invoice itself. AEAT’s own FAQ makes that distinction explicitly. The data builds the issued-invoice, received-invoice, investment-goods and specified intra-EU transaction ledgers, but the original invoice and the commercial evidence remain relevant. AEAT: what SII sends

Keep that boundary in view when reviewing the accounts. An SII record may show the invoice number, dates, counterparty and tax treatment fields required by the system. It does not, by itself, explain a disputed service, prove delivery, preserve the contract or show why a credit note was agreed. Nor does sending an issued-invoice record guarantee that the general ledger posted the sale to the correct revenue account.

SII timing also creates a practical reconciliation point. For issued invoices, the general rule is four calendar days from issue, subject to the special eight-day case and the monthly cut-off described by AEAT; received invoices generally run from their accounting registration, again with a final cut-off. Saturdays, Sundays and national holidays are excluded from the calculation under the published rules. AEAT: SII submission deadlines

If bookkeeping is postponed until the VAT return is prepared, SII can end up holding one version while the ledger develops another. Common causes are mundane: a corrected customer tax ID was not updated everywhere, a credit note was posted in a later month, an invoice was registered twice after a software retry, or the accounting date was used where the tax point mattered. None of those explanations should be assumed. They should be demonstrated from the audit trail.

For an SII business, a useful monthly control compares:

the issued and received invoice sequences in the billing and purchase systems;
accepted, rejected, corrected and cancelled SII records;
VAT control accounts and the corresponding accounting entries;
the draft VAT return; and
a dated exception list showing who will resolve each difference.

The aim is to explain why each population differs, then decide whether the invoice record, accounting entry, VAT treatment or period needs correction. Simply forcing the totals to agree destroys that explanation.

Form 347 is useful, but it is not a universal transaction map

Form 347 is an annual information return for transactions with third parties. AEAT’s current business guidance states the general threshold as more than EUR 3,005.06, VAT included, in aggregate with a person or entity over the calendar year. Taxpayers required to keep their VAT ledgers through SII are not required to file Form 347. The official guidance also lists other exclusions and special cases. AEAT: Form 347 scope and exclusions

This gives AEAT counterparty information that can be compared with other data, but it does not make every invoice universally visible. Transactions below the applicable threshold may fall outside the general reporting rule. Some taxpayers and operations are excluded. Some information is supplied through another return instead. Timing, cash-basis rules, advances, returns and credit notes can also make two honest records look different until the underlying treatment is reconciled.

Test scope before amount. Ask:

Was either party obliged to submit Form 347 for this operation?
Is the transaction excluded because it is already reported through another prescribed route?
Are both sides using the same legal name and tax identification number?
Does the difference come from VAT, a credit note, an advance or period allocation?
Is one side comparing invoices while the other is comparing payments?

A supplier statement can help, but it is not a substitute for this analysis. Likewise, asking every counterparty to “confirm the 347 total” without first cleaning the ledger often spreads the error instead of finding it.

Withholdings let a payer describe part of your income

Professional freelancers often see the effect of third-party information most directly through withholding. Where a Spanish payer must withhold from a covered professional fee, the payer reports and pays the withholding under the applicable rules. Form 190 is the annual information return for employment income, economic activities, awards and specified other income subject to the IRPF withholding system. AEAT: Form 190 procedure

That report can identify the recipient and the reported income and withholding figures. This does not mean that every client reports every freelancer invoice: the duty depends on the payer, the recipient, the type of income and whether Spanish withholding applies. An overseas client with no Spanish withholding obligation is not made equivalent to a Spanish business payer merely because both received invoices.

Where withholding does apply, the accounting must preserve the gross transaction. Suppose an invoice shows a gross professional fee, VAT and an IRPF withholding, and the customer pays the resulting net amount. Posting only the bank receipt as revenue understates the fee and loses the withholding credit. The invoice, receivable, tax accounts and cash settlement need to show how the net payment was formed.

A withholding certificate should be checked rather than filed unread. Compare the customer’s identity, gross fee or withholding base, amount withheld and period with the invoice ledger. If the customer reports the wrong recipient, duplicates a fee or allocates it to the wrong year, the books should not be silently changed to imitate the certificate. The difference needs evidence and, where appropriate, correction by the party or taxpayer responsible for the wrong report.

Banking information has defined routes and limits

Claims that “Hacienda sees your bank account” usually mix general information returns with powers used in a specific procedure. Separating the two prevents both complacency and panic.

Financial institutions have defined reporting obligations. From 2026, Form 196 has monthly periodicity, and its filing deadline is the calendar month after the information period. AEAT: Form 196 filing from 2026 The December return includes year-end and last-quarter average balances, aggregate debits and credits, and the other annual fields specified by AEAT; account holders and authorised persons are reported in separate records. AEAT: Form 196 account data

Payment reporting is separate. For 2026 onwards, AEAT says Form 170 reports monthly card and phone-number-linked payments received by businesses and professionals established in Spain. The data includes the business identity, merchant and terminal information, monthly amount and destination account or other destination. It expressly excludes person-to-person Bizum transfers between private individuals from that return. AEAT: Form 170 content

Form 171 does not cover every deposit or withdrawal. It covers deposits, withdrawals of funds and collections of documents made in cash, meaning coins or banknotes, when the amount exceeds EUR 3,000. The rule applies regardless of the physical or electronic means used and whether the operation is denominated in euros or another currency. Order EHA/98/2010, preamble and Articles 3–4

None of those descriptions is an unrestricted live copy of a business bank statement. They are specified data sets with their own fields, periods and reporting entities.

The General Tax Law also allows individual requests concerning account movements during inspection or collection functions. Article 93 requires prior authorisation by the designated tax authority. For a cheque or payment order, the request must identify that instrument; otherwise, it must identify the operations under investigation, the affected taxpayers, account holders or authorised persons, and the period concerned. This is a legal route to obtain detailed banking information in a bounded context, not a standing claim that every official can browse every account without a procedure. General Tax Law, Article 93.3

The same law treats tax information as reserved. Article 95 generally limits its use to applying taxes and resources managed by the administration and imposing the relevant penalties, subject to the statutory exceptions listed there. General Tax Law, Article 95

For reconciliation, a bank feed is useful but incomplete. A receipt may settle several invoices. A platform may deduct fees before paying out. A director may have paid a company expense personally. A loan receipt is cash, but it is not sales income. A sale booked on accrual can belong in the accounts before the customer pays. The bank is one evidence source, not the chart of accounts.

Electronic invoicing does not mean universal automatic transmission

“Electronic invoice” describes a format or process, not one single AEAT reporting route. The safest question is what system generated the invoice and what that system was required or configured to transmit.

SII sends prescribed VAT invoice-record fields rather than the invoice file. Under the rules for invoicing software, a VERI*FACTU system continuously sends structured billing records to AEAT as invoices are issued. AEAT’s current FAQ contrasts that mode with compliant non-verifiable systems, which retain protected records rather than continuously transmitting them. AEAT: VERI*FACTU system modes

So an invoice created as a PDF, exchanged through a customer portal or labelled “electronic” is not automatically an invoice that AEAT has received. Nor does a billing record necessarily contain the full contract, delivery evidence or accounting analysis. On the other hand, a business should not assume that an invoice remains outside AEAT merely because no PDF was uploaded: an SII or VERI*FACTU record may already describe its essential tax fields.

As invoicing systems change, the accounting team needs a map showing which invoice populations flow to SII, VERI*FACTU or another platform, which remain stored locally, and how rejected or corrected records return to the books.

What a mismatch means, and what it does not mean

No single information return gives AEAT a complete, error-free set of accounts, and a mismatch does not by itself prove undeclared income or an incorrect deduction. This is an inference from the limited scope of the reporting systems above, including the fields that AEAT specifies for SII, not a promise about how AEAT will treat a particular discrepancy. A mismatch is a reason to investigate.

Some differences are correct:

an invoice and payment fall in different periods;
a gross fee is compared with a net bank receipt;
a credit note changes the original invoice population;
one system groups settlements while another records individual sales;
the tax point differs from an internal posting date; or
a transaction is reported through one prescribed route and excluded from another.

Other differences expose an error: a missing sales invoice, duplicated purchase, wrong tax ID, omitted withholding, unposted platform fee or return filed from an outdated ledger. Until the cause is known, nobody should label the difference harmless or fraudulent.

Article 131 of the General Tax Law allows verification where a taxpayer’s declaration does not match another declaration or information already held by the administration. The administration may ask the taxpayer to clarify or justify the discrepancy under Article 132. That statutory route is why a documented explanation is more useful than a manually adjusted total with no audit trail. General Tax Law, Articles 131 and 132

Build a reconciliation that another person can follow

The right control is determined by the external data source: reconcile SII at invoice-record level, Form 347 by counterparty and period, withholding by payer and recipient, and payment information against the settlement trail. This is an operational conclusion drawn from the different fields and scopes in the official Form 347 guidance and the other sources above, not a statutory checklist.

Start with a source map. List the systems and returns that can describe each revenue and expense stream. A small consultancy may have issued invoices, bank receipts, customer withholding reports and Form 347 counterparties. An ecommerce business may add a payment processor, marketplace settlement files, refunds and SII. A company with employees has payroll and withholding information too.

Then assign a cut-off. Decide which month, quarter or year is being closed and freeze the extracts used for the review. Otherwise one person will compare Monday’s ledger with Friday’s platform report and waste hours explaining differences created after the first export.

A defensible reconciliation starts with the source document, maps it to the accounting entry, follows it into the relevant tax record or return, and records the reason for every timing or classification difference. This sequence is a recommended control based on the separate records described in AEAT’s SII guidance. The legal rules determine what must be reported; the reconciliation makes the business capable of explaining how it complied.

For each difference, keep:

the amount and affected tax period;
the source systems or returns compared;
the underlying invoice, settlement, contract or certificate;
the reason code, such as timing, scope, correction or error;
the person responsible for the next action; and
evidence of the correction or approval.

Do not overwrite the original export. Preserve it and create a dated adjustment or bridge. If a correction changes a filed return or transmitted record, use the correction mechanism that applies to that filing. The accounting entry, source evidence and tax correction should tell the same story.

Give the review an owner. A bookkeeper may identify a difference, but a tax adviser may need to decide its VAT or withholding treatment. A legal question may sit behind a disputed invoice. Someone still needs to confirm the final accounting entry and whether a return changes. Sending the issue between four inboxes is not coordination.

If the records are already fragmented, TaxFactory’s tax and accounting advisory service can scope a reconciliation around the applicable returns and accounting evidence. If AEAT has issued a formal notice, use the separate guide to preparing for a Spanish tax inspection and work from the actual document and deadline.

A monthly close is the cheapest time to find the gap

Waiting for an annual income-tax or corporate-tax return makes investigation harder. Staff change, platform access expires and the person who understood a correction forgets why it was made. A modest monthly close can catch the gap while the people and records are still available.

The close need not recreate an audit. It should confirm that invoice sequences are complete, bank and payment settlements have a bridge, withholding is recorded gross, known third-party populations have valid tax IDs, transmitted records have been accepted or corrected, and unresolved differences have owners. Quarterly and annual tax preparation can then start from a controlled ledger rather than a folder of unexplained exports.

There is a quieter benefit too. Good reconciliation stops a business from overreacting. When an AEAT figure differs, the team can locate the source, reproduce the bridge and decide whether there is an error. Without that work, even a defensible timing difference feels like a crisis.

This article explains reporting routes in Spain as at 24 August 2026. It is not advice on an individual return or procedure. Reporting duties, thresholds and system coverage depend on the taxpayer, tax, period and transaction. Verify the rules that apply to your facts, especially when correcting a filed return or replying to AEAT.

Frequently asked questions

Does AEAT know all my business income before I file?

No. AEAT may already hold invoice-record, withholding, third-party or payment data that covers part of your activity, but the coverage depends on the reporting system, the transaction and the parties involved. It is safer to identify each applicable source than to assume either that AEAT knows nothing or that it has a complete profit-and-loss account.

Can AEAT see every movement in my business bank account?

Not as an unrestricted live feed. Financial institutions submit defined information returns, and the General Tax Law also permits specified account-movement requests in inspection or collection work with prior authorisation and an identified taxpayer, operation and period. Those routes are different from automatic access to every transaction at all times.

What should I compare when a client has withheld Spanish tax from my invoice?

Compare the gross fee, withholding base, rate, amount withheld, net payment, client identity and tax period across the invoice, bank receipt, ledger and withholding certificate. The payer reports annual withholding information through the applicable return; a difference should be investigated rather than hidden by changing the recorded gross income to match the cash received.

Is every electronic invoice automatically sent to AEAT?

No. SII sends specified VAT invoice-record fields, not copies of invoices. A VERI*FACTU system sends structured billing records as invoices are issued, while a compliant non-verifiable system stores its records instead of sending them continuously. Whether AEAT receives a record depends on the system and whether it applies to that taxpayer and invoice.

What should I do if my accounts do not match a third-party figure?

Preserve the original records, identify the source and period of the difference, reconcile gross amounts, VAT, withholding, timing, credit notes and payments, and document the conclusion. Correct the relevant accounting record or return through the proper route when an error is confirmed; do not force one figure to match before you know why it differs.