Spain VAT guidelines
| FACTSHEET | |
|---|---|
| Country code | ES |
| Tax name | Impuesto sobre el Valor Añadido(IVA) aka VAT |
| Tax Authority | Agencia Estatal de Administración Trubutaria (AEAT) |
Overview
In Spain, sales taxes are known as value-added tax (VAT) and are levied on most goods and services sold in the country. VAT is a consumption tax, which means that it is paid by the end consumer and is generally included in the price of the goods or services. The current VAT rates in Spain are as follows:
- General rate: 21%
- Reduced rate: 10%
- Super reduced rate: 4%
The general rate applies to most goods and services, including food, clothing, and electronics. The reduced rate applies to certain goods and services, such as books, newspapers, and public transport. The super reduced rate applies to a limited range of goods and services, such as basic food products and certain medical services. Businesses registered for VAT in Spain are required to charge VAT on the goods and services they sell and to collect the tax on behalf of the government. They are also required to file VAT returns on a regular basis and to pay the VAT they have collected to the tax authorities. One of the key features of the Spanish VAT system is the concept of intra-Community supplies, which refers to the supply of goods and services between businesses in different EU member states. Intra-Community supplies are generally exempt from VAT in the country of supply, but the business making the supply is required to pay VAT in its own country. This is intended to prevent double taxation and to promote trade within the EU. Another important aspect of the Spanish VAT system is the option for small businesses to use the simplified VAT scheme. This scheme is available to businesses with annual sales of less than €2 million and allows them to pay a flat-rate percentage of their sales instead of charging and collecting VAT on individual transactions. The flat-rate percentage varies depending on the type of business and the amount of sales.