The NIF number and CIF number are often used interchangeably when speaking about tax identification numbers for businesses. It can be quiet confusing when you are forming a company in Spain. In this article we discuss why this is the case, and what the codes really stand for.
The CIF number was replaced by the NIF number in 2008
In 2008, the NIF number replaced the CIF number as the Spanish tax ID for businesses. Before 2008, the NIF number was only used for residents. Currently, both businesses and individuals use the NIF number as their tax id number. Below is more information about the differences.
What is the CIF number?
The CIF number stands for Código de Identificación Fiscal. This was the tax ID for all Spanish businesses up until 2008, with the entry into force of the Royal Decree 1065/2007, 27th of July (in Spanish, the Real Decreto 1065/2007). The CIF number was a tax code that all companies needed to have. The code helped keep records of their business and their employees in order to report and pay taxes and social security contributions within the appropriate time frame. It was then replaced by the NIF number, also known as Número de Identificación Fiscal. Currently, you will need a NIF number to start a business, and it serves the same function as the CIF used to do, only now the name has changed.
The CIF number is still mentioned very commonly in Spain for identifying business numbers. When you are searching for a business number, it makes sense to search for a CIF, because then it is clear you are looking for a business right away, and plenty of sites still have the CIF number instead of the NIF one. Google also indicates that two to three times more searches are done on CIF numbers (red) compared to NIF (blue).
Many business websites still refer to business tax numbers as the CIF number. For example, if you want to find SpainDesk’s CIF number you can see that other websites also refer to our tax number as the CIF number. As we have mentioned, it is not weird to use the CIF number to still refer to businesses. Old habits are sometimes hard to change.
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What is the NIF Number?
The NIF number stands for Número de Identificación Fiscal. Translated to English, it means it is a Spanish tax identification number. It is a unique identification number that facilitates the payment of taxes and regulatory compliance. It is a key identifier for the Agencia Tributaria.
There is no separate number VAT number in Spain. So, if you are dealing with a business, you can also find this number on the invoices.
When do you need the NIF number?
If you are participating in any economic activity in Spain, you will need to get a NIF number. The NIF number is used for both people and businesses that need to pay taxes in Spain. So when you are starting a business in Spain, you need to get a NIF. Below we discuss the tax identification numbers related to Spanish citizens, ex-pats, self-employed, and businesses.
Spanish citizen: You will have your own personal NIF number when you are a Spanish citizen. This number is necessary for many formalities, such as opening bank accounts and signing contracts. This number will also be required when paying taxes or applying for a job.
Expats in Spain: When you are an international in Spain, you need a NIE number. This number is necessary for many purposes such as starting a business, opening a bank account, signing contracts, and working in Spain.
Autónomo in Spain: Self-employed people in Spain are called Autónomo. Because self-employed are not separate entities from the owner, the owner will pay Autonomo tax on their personal income tax. Therefore the owner’s NIF number or NIE number is used also as a VAT number for the Autonomo registration.
Businesses in Spain: When a Spanish limited liability company is set up, it needs to get a NIF number for itself (also called a CIF number). While the owners need a Spanish tax identification number to set up the company, the company will get its own VAT number. Foreign companies also need this number to open a branch in Spain.
What do the numbers of the NIF number mean?
The NIF comprises nine characters: a letter followed by seven numbers, followed by a character that is either a letter or a number. The first letter in the code designates the sort of company or institution. Find below the meaning of each letter:
A. Public limited liability companies
B. Limited liability companies
D. Commendatory companies
E. Communities of property
F. Cooperative companies
H. Communities of owners
J. Civil societies
P. Local companies
Q. Public institutions
R. Religious Congregations and Institutions
S. Bodies of the State Administration and the Autonomous Communities
U. Temporary Joint Ventures
V. Other types that are not defined in the other keys
N. Foreign entities
W. Permanent establishments of entities non-resident in Spain.
The two numbers following the first letter identify the province in Spain where the company was originally created. With this, you can learn a lot about the entity by knowing the NIF number.
Find a NIF number in the company registry
If you are looking for a company or business name, you can check that it is not already used by searching the companies registry in Spain.
The company registry is a database of all officially registered companies and other business entities in Spain. The information about each entity’s legal status, place of registration, owners and managers is available to the public.
Important takeaways on the CIF and NIF number
The NIF number is the tax identification number that facilitates the payment of taxes and regulatory compliance. As you can see, the NIF, priorly known as CIF, is vital in getting a business started in Spain, since every time you are dealing with tax, accounting, invoices, the Tax Office or any Spanish institutions, this is what will identify your business.
At SpainDesk, we can help you in the process of applying for a NIF number and everything that comes with forming a company in Spain. Don’t hesitate to contact us at firstname.lastname@example.org if that is the case or you want any more information on the matter.
Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.
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