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The VAT tax rate in Spain is 21%, with reduced rates of 4% and 10%.
The 10% rate applies to certain goods and services, such as the purchase of newly built properties, hotels and restaurants, health products, and entertainment and sports activities.
The 4% rate applies to goods considered as basic necessities, such as certain food and reading material (newspapers, magazines, books).
For further details about the reduced rates, see this table, published when Spain raised the VAT tax rates in 2012.
In addition to the general regime, there are special regimes with other VAT rules, such as for travel agencies, antiques, and agricultural and livestock production.
Some professional activities are exempt from VAT, such as private classes, medical services by registered professionals recognized in Spain (doctors, dentists, psychiatrists, speech therapists, opticians), financial and insurance institutions and agent commissions.
IGIC (Impuesto General Indirecto Canario): This is the tax in the Canary Islands, in use since 1993. There is no VAT in the Canary Islands, Ceuta or Melilla.
The IGIC tax is charged on acquisition of goods and services in the Canary Islands by companies and professionals doing business within the region, as well as on imports of goods to the region. When a Canarian company or professional does business with mainland Spain it will be considered as an operation without VAT. Since Jan 1, 2020, the standard IGIC rate is back at 7%.
IPSI (Impuesto sobre Produccion Servicio e Importacion): This is the tax in Ceuta and Melilla. This tax dates from 1991. Since February 13, 2019, the rate is 0,5% for services related to marketing, advertising, and e-commerce. Since January 2019, Ceuta has a 0.5% tax rate for the game industry if they have a permanent establishment in Ceuta territory, as described in the regulations regarding IPSI.
Read our pages for information about registering your foreign company in Spain or about registering your Spanish company in the EU VAT Registry (VIES).
EU VAT Registry (VIES)
Agencia Tributaria Spain's tax agency
Does my Spanish company always need to include VAT tax when billing our clients?
What is VIES?
With an SL, when do I get a refund of the VAT tax I've paid?
What is a VAT reverse charge?
My German company is buying in Spain. Can we recover VAT tax paid?
My French company is selling in Spain. Can we avoid having our Spanish clients pay VAT tax?
I operate a shoe company in the USA. We are starting to manufacture our shoes in Spain. Will the VAT automatically be deducted by the Spanish shoe factory, since we are not located in a country that uses the VAT system?
We are a UK company that provides onsite computer server support. We have been asked to undertake this role in Spain. Since we are required to charge VAT locally, we will require a VAT number, right?
We are a Swiss company and we are going to open a call center in Barcelona to serve our European (non-Spanish) clients. Do we need to register for VAT in Spain?
I plan to sell online in Spain. Do I charge Spanish VAT tax?
How can a tourist get a VAT refund in Spain?
It is the nature of the transaction that dictates whether or not VAT should be charged. In the above exceptions, certain administrative details need to be complied with in order to qualify for the VAT exemption. When in doubt, charge VAT.
If you have a client located in another EU country, in some cases you may have to register in that country then charge VAT from that local entity.
For more information, please read the EU site.
Where refunds need to be made, we can put this process in motion for you.
If you are a non-EU visitor to Spain and you spend over 90 euros in a "Tax Free" affiliated store, then ask a person from the store for two copies of the tax refund form, and prepaid envelope. On the day of your departure, present the tax refund form to the customs officials at a booth in the airport. Have the goods ready for a possible inspection. They stamp the form, then you mail the form. You will receive your refund in the currency of your choice.