Understanding N.I.F. Revocation and Reinstatement in Spain

In Spain, the Tax Identification Number (N.I.F) and the Foreigner Identification Number (N.I.E.) are crucial identifiers used for distinct purposes. The N.I.F. serves as the fundamental identifier for tax-related matters, essential for both individuals and legal entities. On the other hand, the N.I.E. is specifically designated for non-Spanish individuals who require identification for activities such as employment, property ownership, or financial transactions. While the N.I.F. is used for tax obligations, banking transactions, and any business activities, the N.I.E. is primarily for administrative and legal purposes related to non-Spanish residents. Understanding the differences between these identifiers is essential for navigating the specific requirements and implications associated with each. 

What happens when the N.I.F. is revoked? 

When an N.I.F. is revoked, it can have serious implications, rendering the number invalid for tax identification. This can significantly hinder the entity`s ability to engage in various activities: 

• Economic Restrictions: The entity may be unable to legally carry out business transactions
• Banking Limitations: Access to banking services and credit can be severely restricted
• Legal and Administrative Challenges: The inability to obtain necessary certifications or meet legal requirements can cause operational delays and complications

What are the typical reasons for N.I.F. revocation? 

N.I.F. revocation can occur due to various reasons, as specified in Article 147 of the General Regulations on Tax Administration and Inspection Actions and Procedures (RGAT). Common causes include: 

• Failing to submit the necessary paperwork to get a permanent N.I.F.
• Declaring the organization bankrupt
• Missing three consecutive deadlines for filing tax returns
• More than a year without receiving tax notices at the listed address
• Declaring the existence of nonexistent economic activity
• Using the same funding to launch several businesses
• Failing for four years in a row to submit yearly accounts to the business registry 

How can the N.I.F. be reinstated? 

The revocation of an N.I.F. isn`t necessarily permanent. To restore an N.I.F., the entity must eliminate the issues that led to its revocation. The reinstatement process involves several steps: 

1. Application Submission: a formal request must be made to the tax authorities
2. Corrective Action Proof: documentation that proves the original issues have been resolved
3. Verification of Ownership: information about the shareholders, legal representatives, and actual owners
4. Detail of Business Activities: a description of the intended business activities and current tax registry status
5. Specific Documentation: if the entity has been dissolved, a dissolution deed must be included

What are the New Provisions under Royal Decree 249/2023?

The recent Royal Decree 249/2023 has clarified the reinstatement process, particularly emphasizing the need to correct any lapses, such as not filing annual accounts, before applying for reinstatement. 

The process involves: 

• Submitting the Application: the required documentation can be submitted through various channels, including online, at AEAT offices, or other approved locations under Law 39/2015. 
• Review Period: the tax authorities will review the application within a three-month period to determine whether the issues have been adequately resolved.
• Outcome and Notification: if the application is approved, the decision is published and the applicant is notified. If denied, there is an option to appeal the decision within one month.

Our Tax advisors or lawyers who specialize in tax law at Gentile Law can provide expert assistance, ensuring that the reinstatement process is handled efficiently and correctly. Their guidance can be crucial in navigating the legal and procedural complexities involved in resolving N.I.F. issues.