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What VAT applies in Spain?

Publication date: 10.11.2020

IVA, short for “Impuesto sobre el Valor Añadido,” is the equivalent of Value -Added-Tax. VAT has been in force in Spain since 1986, when Spain joined the European Union. The basic VAT rate in Spain is 21% and covers all products and services that are not covered by the reduced rates of 10% and 4% and the zero rate.

 

Value-added tax (PTU) is a value-added tax, which is a tax on the increase in the value of goods as a result of the production process or creation of services. VAT is an indirect tax, collected at each successive stage of trade in goods or services. VAT applies to both sellers and buyers of goods and services, as its value is added to the net value of the transaction.

VAT in Spain

VAT has been in force in Spain since 1986 when Spain joined the European Union. The basic VAT rate in Spain is 21% and covers all products and services that are not covered by the reduced rates of 10% and 4% and the zero rate.

The VAT rate in Spain of 10% applies

  • Some groceries
  • Water resources
  • Certain pharmaceutical products
  • Some medical devices for disabled people
  • Domestic passenger transport
  • Intra-Community and international transport by road, rail and inland waterways
  • Restaurant services
  • Catering services
  • Eating to go
  • Some non-alcoholic beverages
  • Admission to amateur sports events
  • Bars
  • Cafés
  • Nightclubs
  • Cut flowers
  • Plants for food production
  • Some construction work in new buildings
  • Wastewater treatment
  • Some social services
  • Collection of household waste
  • Agricultural supply
  • Accommodation in a hotel
  • Some social housing
  • Some repairs and renovations of private apartments
  • Admission to certain cultural events

The Spanish VAT rate of 4% includes

  • Some groceries
  • Certain pharmaceutical products
  • Some medical devices for disabled people
  • Some books
  • Some newspapers
  • Some journals
  • Some social housing
  • Some social services
  • Some home care services
  • Some construction work in new buildings

The zero VAT rate in Spain applies to

  • Intra-Community and international transport by air and sea
  • Taxation of certain gold coins and bars

VAT identification number in Spain

There are three formats of VAT identification numbers in Spain. Each of them consists of 9 characters and one or two letters. They appear respectively at the beginning, at the end or at the beginning and at the end of the identification number. The Spanish code for EU VAT is ES.

Requirements of the Spanish VAT invoice

VAT invoices in Spain must be issued at the time of supply of goods to non-taxable persons. If the customer is a taxable person, they can be issued until the 16th day of the month that follows the supply. VAT invoices in Spain must be kept for four years. VAT invoices in Spain must contain at least the following basic information:

  • Date of issue and transaction (if different)
  • Unique number
  • Supplier’s VAT number
  • Full supplier and customer addresses
  • A full description of the services provided or
  • Details of the quantity of goods
  • Unit prices
  • Details of any discounts granted
  • Net value of the supply subject to taxation
  • Applied VAT rates
  • Amount of VAT broken down into rates
  • Total gross invoice amount

If any foreign currency is used, the invoice rates must be clearly indicated. For transactions of less than EUR 400, it is possible to provide a simplified version of the invoice.

When should you register for VAT in Spain?

In Spain, VAT returns are submitted monthly, quarterly and annually.

Monthly returns must be made if the sales of goods in the previous year were less than EUR 6 million. If the sales exceeded EUR 6 million, the returns must be made quarterly. The annual declarations must be made by all companies registered for VAT in Spain.

Monthly returns must be submitted by the 30th day of the following month and quarterly returns by the 20th day of the following year. Annual returns must be submitted by the 30th day of January of the following year. The frequency of reporting VAT in Spain depends on the level of income.

In addition, the entrepreneur should register VAT in Spain, if their company:

  • Imports goods to Spain (even if there is immediate onward delivery to another European Union country)
  • Purchases and sells goods in Spain (if the supplier and customers are not a Spanish company with VAT registration – reverse charge)
  • Sells goods to Spanish consumers over the Internet (subject to the Spanish distance VAT registration threshold)
  • Stocks goods in a consignment warehouse in Spain
  • Charges for admission to events or exhibitions in Spain

Penalties and VAT interest in Spain

The penalties for non-compliance in VAT settlements are between 20% and 200% in Spain. There are also interest penalties for late payments, usually 5% per month. These penalties can increase by up to 20% after more than a year.

Limit of mail-order sales in Spain

The limit for mail-order sales in Spain is EUR 35,000.

Must read what is VAT-OSS? Changes to VAT settlements in the EU for online retailers

Intrastat in Spain

In addition to the VAT declaration, foreign companies operating in Spain may be required to report Intrastat statistics. It contains information about the import or export of goods between countries belonging to the European Community and the movement of their own goods to a warehouse located in another Member State.

The threshold for Intrastat imports is EUR 400,000per year, as is the threshold for Intrastat exports – EUR 400,000, too.

The monthly Intrastat report should be submitted by the 12th day of the month following the reporting period.

The tax office in Spain

The address of the Spanish tax office (Agencia Estatal de Administración Tributaria) is:
Av. de Selgas, 1, 46800 Xàtiva, Valencia, Spain

The Internet address is: www.agenciatributaria.es
The office can be contacted by telephone: +34 91 554 87 70

Do you want to register for VAT in Spain? >> contact us

Adam Grabiński