VAT In Spain: A Recap

All posts, Spanish taxation Leave a comment   Published on par Jonatan Carbonell

VAT spain

Let’s take a look at VAT or ‘IVA’ rates in Spain and to what they apply. Despite the fact that the government, in an attempt to confront the Spanish economic crisis, increased Spanish VAT in 2012 by 3 points, the tax rates still remains lower than the European average of 21.13%. 

VAT in Spain works in the same way as in France and many other European countries. All VAT that is paid on purchases is deductible and the VAT on sales is taken care of by the State, in the case of Spain by the Agencia Tributaria. If the VAT covered by the State is greater than the deductible VAT, then the company should return the difference to the Agencia Tributaria. If not, you will gain a tax credit from the State.

The Different VAT Rates in Spain

There are a few different rates of VAT in Spain. Here they are explained:

Standard Rate

The default VAT rate in Spain is 21% compared with 18% prior to the changes in 2012. This applies to the majority of goods and services in Spain.

Reduced Rates

There are two types of reduced tax rates:

    • Reduced rate of 10%

This rate applies to certain services such as catering, public transport, entrance to cultural sites and housing construction. Also, everything in terms of material acquisitions, imports and exports of goods within Europe (intracommunity) in terms of foodstuffs, water, farming materials etc.

    • Super Reduced rate of 4%

This rate applies to services for maintainence and upkeep such as the adaptation of public transport for disabled citizens. Material acquisitions, imports and exports of raw materials, books and school materials all fall under this category too.

Intra-community VAT

Intra-community VAT in Spain facilitates B2B (Business to Business) exchanges within members of the European Union. Its main advantage is that it allows you to engage in business with companies beyond the Pyrenees. Whilst at the same time, exempting you and your clients from paying VAT on their bills.

However, just be aware that the application for obtaining an intracommunity VAT number can take between 2 months to 1 year!

Published on par Jonatan Carbonell

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