VAT in Spain (IVA): Rates, Exemptions and How It Works

How to read IVA on a Spanish bill

Consumer prices already include VAT: the law requires businesses to show consumers the full final price, taxes included. Prices “+ IVA” are typical of quotes between businesses.

A till receipt (ticket) is a simplified invoice (factura simplificada). It shows, among other things, the VAT rate (tipo), sometimes with “IVA incluido” (VAT included), the total and, if it mixes rates, the base imponible (price before VAT) of each. The cuota (VAT in euros) only has to appear if a business or freelancer asks for it, or a private individual needs it for a tax purpose.

At a restaurant, food and drink served at the table carry 10%, wine included: a €66 dinner has €6 of VAT on a €60 base. The same wine bought at the supermarket pays 21%. Here's a supermarket receipt with three rates (made-up prices, VAT included):

⚠️ IVA is not a tip or a service charge. It's the tax the restaurant has to charge you and pay to Hacienda, already inside the menu price.

How to work out the VAT included in a price

Multiply to add VAT and divide to take it out; the difference is the VAT (rounding can move the base by a cent).

Or let our VAT calculator (in Spanish) do it.

How VAT works in Spain: output VAT minus input VAT

In the general scheme, businesses and freelancers pay Hacienda the difference between the VAT charged on sales (output VAT, IVA repercutido) and the deductible VAT paid on purchases and expenses (input VAT, IVA soportado) of each period. An example at 21%: a manufacturer sells a lamp to a shop that is a limited company (S.L.), which sells it to you.

Hacienda gets €31.50, exactly the VAT you paid, which you can't subtract as a private individual.

VAT is not calculated on profit. What's subtracted is the VAT on purchases, not the purchases themselves, and staff salaries carry no VAT, so they don't lower the VAT to pay.

VAT exemptions in Spain

Exempt is not the same as a reduced rate: an exempt service carries no VAT, but its provider can't subtract the VAT paid on purchases for it. The ones you're most likely to meet:

• Healthcare: hospitals and clinics (private ones with authorised or notified prices), doctors, dentists and other health professionals diagnosing, preventing or treating illness, psychologists included. Vets aren't exempt.
• Education: schools, universities and language or vocational training by public or authorised centres. Also private lessons on official curriculum subjects given by an individual, unless giving them requires registering under the business or artistic headings of the IAE (the tax on economic activities), as an academy does.
• Insurance and banking: insurance and many financial services, such as bank accounts.
• Renting a home to live in, with the garage and furniture rented with it.

Some rentals do carry VAT: business premises, a garage rented on its own and furnished flats with hotel-type services such as cleaning or laundry.

Canary Islands, Ceuta and Melilla: IGIC and IPSI instead of VAT

Bringing things back counts as an import. Goods bought in the Canary Islands, Ceuta or Melilla and taken in your luggage to the mainland or the Balearic Islands are VAT-free up to €430 per person by air or sea (€300 by other routes, €150 for under-15s). Above that, only items within the limit are exempt, and one item can't be split. Tobacco and alcohol have their own limits.

Do foreigners pay VAT in Spain?

Yes. Tourists, residents and non-residents pay the same VAT: the law taxes the sale, not the buyer's nationality.

The exception is tax-free shopping for travellers whose habitual residence is outside the EU: they get back the VAT on goods (not hotels or restaurants) taken out of the EU within three months after the month of purchase, for personal use or as gifts. Living in Spain or another EU country rules it out, whatever your nationality, though residents of the Canary Islands, Ceuta and Melilla can claim it for goods bought elsewhere in Spain. More on tax-free shopping in Spain (in Spanish). Living here? VAT isn't your only tax: see taxes for foreigners in Spain.

VAT for freelancers (autónomos) in Spain

As an autónomo, you're a business for VAT purposes: in general you charge VAT on your invoices, pay it to Hacienda and subtract the VAT on your business expenses. Employees don't.

• Register before you start with modelo 036, the census declaration. Filed late, it's a €400 fine (€200 if you file before Hacienda asks).
• No minimum: if your activity is taxed, VAT starts with your first invoice.
• Not always 21%: doctors, private tutors on curriculum subjects registered as professionals (not as an academy) or insurance brokers invoice without VAT; hotels, restaurants or passenger transport go at 10%.
• Modelo 303 every quarter, in the first 20 calendar days of April, July and October and the first 30 of January. It's monthly with over €6,010,121.04 of turnover last year or on the monthly refund register.
• Modelo 390 every January (first 30 calendar days), the annual summary, with some exceptions.
• Even with no activity, you file both.
• Keep VAT record books (libros registro) of the invoices you issue and receive.

If everything you do is exempt, like healthcare or education, you file neither. But if a business not established where Spanish VAT applies sells you a service for your work, you still declare that VAT on modelo 309 (a non-periodic VAT return), and you can't subtract it. Selling to clients abroad without Spanish VAT doesn't count as exempt here: you still file. Self-employed retailers in the sectors set by the regulations go under the equivalence surcharge scheme (recargo de equivalencia): suppliers charge them VAT plus a surcharge, and they neither file the 303 nor subtract VAT for that activity; if that's all they do, those services from non-established businesses also go on the 309. In the Basque Country and Navarre you may file with the regional tax authority, with its own forms; in the Canary Islands, Ceuta and Melilla you don't charge VAT. Here's how Form 303 works (in Spanish).

Which VAT you can deduct as a freelancer (and which you can't)

• A proper invoice in your name. A till receipt only counts if you ask for your NIF, your address and the VAT amount shown separately.
• Only what you use directly and exclusively for work. Nothing you also use privately, except capital goods, in proportion to their business use. An ordinary car you also use for work is presumed 50% business, and you must be able to prove that use.
• Not for food, drink, tobacco, entertainment, client gifts or jewellery, unless it's what you sell. Travel, hotels and restaurants only if deductible in your income tax (IRPF).

You have four years to deduct it.

Clients in other EU countries and outside the EU

Services to a business in another EU country go without Spanish VAT, with exceptions such as property in Spain, passenger transport or admission to events held in Spain. The client declares it (reverse charge): your invoice states “inversión del sujeto pasivo” and their VAT number. First you need to join the Registro de Operadores Intracomunitarios (ROI), which gives you your Spanish VAT number (in Spanish): your NIF with ES in front, requested in your census declaration. It also works the other way: when a business not established where Spanish VAT applies sells you a service for your work, you're usually the one who declares that VAT (reverse charge), which also requires being in the ROI.

Operations with businesses in other EU countries, in both directions, also go in modelo 349, the intra-EU summary. Selling goods to an EU business is only exempt if they're shipped to another EU country, the client gave you a VAT number from an EU country other than Spain and you include the sale in the 349.

Private clients in other EU countries generally pay Spanish VAT. The exception is goods you ship to them and services supplied electronically (such as software, music, films, texts or distance learning online), telecoms or broadcasting: once those sales to private clients across the EU pass €10,000 a year before VAT, last year or this one, you charge the VAT of the client's country instead, and you can declare it through the One Stop Shop (modelo 369).

Outside the EU, services to businesses carry no Spanish VAT either, with the same exceptions, such as property in Spain. Private clients generally pay it, except for some services (consulting, legal, advertising or translation, among others) if they live outside the EU (not in the Canary Islands, Ceuta or Melilla) and don't use them in Spain. Goods shipped outside the EU are exempt exports. Either way, you keep subtracting your input VAT.

Common VAT mistakes in Spain

• Taking IVA for a tip. It's the tax, already in the price.
• Applying 21% in the Canary Islands. There's no VAT there: IGIC's general rate is 7%.
• Asking for tax free as a resident of mainland Spain or the Balearics. It's only for residents outside the EU (or in the Canary Islands, Ceuta and Melilla), whatever their passport.
• Charging Spanish VAT to an EU business with a VAT number. Most services to them go under the reverse charge.
• Not charging VAT because you bill little. There's no minimum.
• Skipping the 303 in a quarter with no invoices. File it anyway. Late on your own, with nothing to pay, the fixed €200 fine is halved to €100; with tax to pay, it's a 1% surcharge plus 1% per full month (15% after 12 months, plus interest).

Living or working in Spain? VAT in a nutshell

• 21%, 10% or 4%, already included in consumer prices: IVA on a bill is the tax, not a tip.
• Exempt: healthcare, education, insurance, many banking services and renting a home to live in.
• Other taxes in the Canary Islands (IGIC) and in Ceuta and Melilla (IPSI).
• Most freelancers charge VAT from their first invoice and file modelo 303 every quarter, even with no activity.

Living in Spain? We can help with your income tax return: see our tax return service for foreigners (in Spanish). Self-employed? Our service for freelancers (in Spanish) files your quarterly VAT returns for you, except in the Basque Country, Navarre, the Canary Islands, Ceuta and Melilla or under the módulos scheme. Start for free with TaxDown.

Official sources

• AEAT. VAT tax rates
• AEAT. Modelo 303
• AEAT. Modelo 390
• AEAT. Modelo 349
• AEAT. Modelo 036
• BOE. Ley 37/1992 (IVA)
• BOE. Real Decreto 1624/1992 (IVA regulation)
• BOE. Real Decreto 1619/2012 (invoicing)
• BOE. Real Decreto 1065/2007 (census and ROI)
• BOE. Ley 58/2003, General Tributaria
• BOE. Real Decreto Legislativo 1/2007 (consumers)
• BOE. Decreto Legislativo 1/2025 de Canarias (IGIC)
• BOE. Ley 8/1991 (IPSI)
• BOE. Ley 12/2002, Concierto Económico
• BOE. Ley 28/1990, Convenio Económico