Corporate housing invoicing in Spain: how VAT and company-to-company contracts work

Settle the contracting structure before you settle the property

The cleanest way to run a Spanish placement is to contract company to company: your entity signs the lease, the provider's entity issues the invoice, and the employee simply moves in. Most questions about corporate housing invoicing in Spain and VAT come down to three points — which lease regime the contract sits under, whether the letting is treated as exempt or taxable for VAT, and whether your entity has a Spanish withholding obligation on the rent. Agreeing those three before signature prevents the two problems finance teams complain about most: an invoice that cannot be posted, and a tax treatment that appears to change halfway through an assignment.

Who signs, and what that changes

In a company-to-company placement the tenant is the employer, not the employee. The individual is named in the contract as the authorised occupant, which matters both for tax purposes and for building access, insurance and house rules. Two drafting points are worth raising early. First, decide whether your entity wants the right to substitute the occupant if the assignment changes hands — for rotating engineering or project roles this is often more valuable than a longer term. Second, decide which entity signs: a Spanish subsidiary, an EU parent, or a third-country parent. That single choice drives the VAT and withholding analysis below, so it should not be left to whoever happens to be on the email thread.

It is also worth being explicit about what the rate covers and what is billed separately, and about how utilities are treated. Providers differ, and assumptions are expensive. At Palacete 10, lease terms are agreed per contract rather than sold from a fixed menu, and we set out what is included in the written proposal so your finance and mobility teams see the same document.

Which lease regime applies

Spanish residential letting is governed by the Ley de Arrendamientos Urbanos (LAU). Under Real Decreto-ley 29/2026, in force since 8 October 2026, temporary corporate housing is classified as an arrendamiento de vivienda temporal governed by Title II (the housing rules). The old arrendamiento por temporada under Title III (leases for use other than dwelling, or uso distinto del de vivienda) no longer applies to housing, as article 3.2 now expressly excludes contracts whose object is accommodating people.

Under article 2.3 of the LAU, a temporary housing lease covers a habitable dwelling while the tenant is temporarily away from their habitual home for a justified and demonstrable reason. The contract must state that cause expressly; it must be real and provable, and the landlord bears the burden of proof under article 7.2. Without that justified cause, the contract is treated as an ordinary residential lease retroactively from signature. The duration is freely agreed, but must be more than 31 days and, as a general rule, no more than 12 months including extensions, extending past 12 months only if the cause genuinely continues.

Crucially for mobility managers, how this definition applies where a company is the tenant and an employee is the occupant is not settled under the reformed framework; a Spanish lawyer should confirm the position for your placement. Furthermore, because Real Decreto-ley 29/2026 is a decree-law that Congress must validate within 30 days—its predecessor, RDL 26/2026 of 29 September, was voted down on 2 October—readers should check the legal position when they sign.

Corporate housing invoicing in Spain and VAT: the basic test

From 1 December 2026, under Real Decreto-ley 29/2026, a furnished letting is taxed at 10% rather than exempt where the landlord provides hotel-type services (restaurant, cleaning, laundry and similar) or where the stay for the same tenant is 30 nights or fewer. Outside those cases, residential lettings are generally VAT-exempt.

Because VAT classification depends on the specific contractual arrangements and operational structure, the supplier states the treatment it applies, and your company's tax adviser confirms it.

Withholding tax and Modelo 115

Where a Spanish business tenant leases urban property, it is generally required to withhold income tax from the rent and remit it to the tax authorities, reporting it periodically on Modelo 115 with an annual summary. Exceptions exist, including for certain landlords whose activity is property letting and for exempt lettings. Foreign entities without a permanent establishment in Spain do not usually carry this obligation. The practical consequence is that the amount your accounts payable team transfers may be lower than the invoice total, and both sides need to expect that. Confirm the position before the first payment run, not after it.

What a valid Spanish invoice must contain

Spanish invoicing rules are prescriptive, and an invoice missing an element can be rejected in an audit. Ask to see a sample invoice during procurement and check that it shows:

• the full legal name, registered address and NIF/CIF of both the provider and your entity;
• a sequential invoice number and issue date, and the period the rent covers;
• the taxable base, the VAT rate and amount applied, or an express reference to the exemption relied upon;
• any withholding shown as a separate line, with the net amount payable;
• your purchase order, cost centre or assignment reference, if your systems require it for posting.

Spain is also phasing in mandatory business-to-business electronic invoicing and stricter requirements for invoicing software. Under Orden HAC/1028/2026, the implementation timeline is fixed: 6 October 2027 for businesses with annual turnover exceeding €8 million, and 6 October 2028 for all other businesses and professionals.

Deposits, guarantees and payment set-up

Spanish practice is a legal deposit (fianza), which the landlord lodges with the relevant regional housing authority, sometimes alongside an additional guarantee such as a bank guarantee or corporate parent guarantee. Payment is normally by SEPA transfer to a Spanish IBAN, monthly and in advance. Three details are worth fixing in the contract: the invoicing date each month, the payment terms your finance function actually works to, and the process for returning the deposit, including the inspection and the timescale.

At Palacete 10, all five residences are let company to company by Vamoz Marbella SL, which has operated on the Costa del Sol since 2013 — one supplier, one invoice per month, one point of contact. Practical questions about leasing and invoicing are answered on our FAQ page, and enquiries are answered within 24 hours.

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