VAT in Spain

VAT for companies and individuals

The last significant increase in VAT in Spain was on 1 September 2012. This increase of 3 points on tax charges has allowed the government to confront the current economic crisis but also to limit the consequences of numerous cases of fraud. Despite this recent increase, VAT in Spain remains less than the average of 21.3% throughout the EU.

Fiscal pressure has increased for consumers but not for companies whose profits are unaffected. In fact, Spain has not changed the rate of corporate tax since 2008 and it remains at 30%.

Basic VAT rate in Spain

21% is the rate for VAT in Spain and it applies by default to the majority of service provisions on offer. Tobacco, alcohol, cosmetics and personal hygiene products all have this same tax. Only recently, some services that benefit from a reduced rate were taxed at 21%: cinema and theatre tickets, hairdressing and beauty treatment centres, funeral services, gardening, optical services etc.

Reduced VAT rate in Spain

The reduced rate of 10% applies to all food (meat, fish, water etc.) and all sanitary products, transport and the majority of accommodation services and housing construction. Purchasing housing, on the other hand, is excluded from this type of tax.
“Super reduced” tax of 4% applies to food products of first necessity such as bread, flour, eggs, cheese and fruit and vegetables. Books, journals, schooling materials and medicine as well as all other pharmaceutical goods are all included within this rate too.

Intra-community VAT

This type of tax is a 13 character identifier used to facilitate exchanges between professionals both within the European Union. This number must appear on the relevant invoices for these intra-community exchanges or deals. The purchase and the sale of both merchandise and services between several companies in the EU are subject to a particular tax system and this must be taken into account. Exports and the sale of goods from Spain to other European countries are exempt from VAT.

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