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Spanish VAT rates and VAT compliance

Spanish VAT rates

Spain, like other EU member states, follows the broad rules for value added tax (VAT) as set out by the EU, such as the standard VAT rate is required to be above 15%. Also, like other countries, Spain sets the level of its own VAT rates. 

 

These VAT rates should be used by providers of taxable goods and services when selling into or operating within Spain. 

Spain VAT rates

RateTypeWhich goods or services
21%StandardAll other taxable goods and services
10%ReducedSome foodstuffs; water supplies; certain pharmaceutical products; some medical equipment for disabled persons; domestic passenger transport; intra-community and international transport by road, rail and inland waterways; some social housing; some renovation and repair of private dwellings; agricultural supplies; hotel accommodation; restaurants and catering services; some social services; domestic waste collection; some soft drinks; bars, cafes, night clubs and alcoholic beverages sold therein; take away food; cut flowers and plants for food production; some supplies of new buildings; some construction work on new buildings; admission to sporting events (amateur sporting events only); treatment of waste and waste water; admission to certain cultural services
4%ReducedSome foodstuffs; some pharmaceutical products; some medical equipment for the disabled; some books (excluding e-books); certain newspapers and periodicals; some social housing; some social services; some construction work on new buildings; some domestic care services
0%ZeroTaxation of some gold coins, ingots and bars; intra-community and international transport by air and sea

Spain VAT registration

Before July 2021, businesses selling into Spain were required to register for VAT if their annual imports exceeded €35,000. This VAT registration threshold has since been lowered to €10,000.

Spanish VAT Compliance

Once a business is registered for VAT in Spain, it must fulfil its tax obligations by following the rules of the Spanish tax authorities, including:

  • Issuing invoices with the disclosure details outlined in the Spanish VAT law
  • Electronic invoices must include the proper signature, authenticity, and agreement of the recipient
  • Maintenance of accounts and records, which must be held for at least 10 years
  • Correct invoicing of customers for goods or services in accordance with the Spanish time of supply VAT rules
  • Processing of credit notes and other corrections
  • Use of approved foreign currency rates

What is the tax point for Spanish VAT?

The tax point (time of supply) rules in Spain determine when VAT is due. For imports, it is the time of importation. For goods, it’s considered as the point of transfer of title. Any VAT due should then be declared in the businesses’ subsequent VAT returns.

 

The tax point for Spanish services is when performed, or on an accruals basis as ‘enjoyed’.

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How much is VAT in Spain?

Spain has three VAT rates: the standard VAT rate of 21%, the reduced VAT rate of 10%, and the super-reduced VAT rate of 4%. 

 

The standard VAT rate is applied to most goods and services, while the reduced VAT rate of 10% applies to the purchase of newly built properties, hotels, food, books, and medical equipment, health products, and sports and entertainment activities. The super-reduced rate of 4% applies to certain food items, newspapers, magazines, and books. 

 

Spain also has a number of zero-rated goods. These include gold coins and bars, and intra-community and international transport. Businesses must still report the sale of zero-rated goods on their VAT return, despite no VAT being charged.

 

More details on which rate is applied to goods and services can be found in the table above. 

 

Some goods and services are exempt from VAT in Spain. These include education, insurance, financial transactions, real estate transactions, goods and services related to health and well-being, services related to culture and art, some types of gambling activities, some goods or services provided by government-run postal services, and some digital currencies that can be used as a medium of exchange. 

What is a VAT rate?

Spain, like other EU member states, is required by the EU to impose a minimum VAT rate of 15% on all goods and services. VAT is charged to consumers and collected by businesses, who are responsible for reporting it to the Spanish tax authority.

 

Items or services included in Annex III of the VAT Directive — a central list of supplies of goods and services to which reduced rates and exemptions can be applied — can have lower rates. 

 

E-invoicing in Spain 

E-invoicing is mandatory in Spain for B2G transactions. The Spanish tax authority introduced the SII electronic invoice data reporting system for both issuers and recipients. E-invoicing is expected to become mandatory for B2B transactions from July 2025. In the initial phase, businesses with revenues exceeding €8 million will be implicated, followed by all other taxpayers 12 months later. 

 

Need a fiscal representative in Spain?

In addition to registering for VAT in Spain and completing VAT returns, non-EU businesses operating in Spain may need to appoint a fiscal representative — these are responsible for the accurate VAT submissions of their non-EU clients.

Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.

 

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Need help with your Spanish VAT compliance?

Researching Spanish VAT legislation is the first step to understanding your VAT compliance needs.

Avalara has a range of solutions that can help your business depending on where and how you trade. 

 

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