Spain VAT Guide 2026 — IVA (21%/10%/4%)

How IVA Works

• VAT mechanism: IVA is a consumption tax charged at each stage of the supply chain. Businesses charge IVA on their sales (output VAT — IVA repercutido) and deduct the IVA they pay on their purchases (input VAT — IVA soportado). The difference is remitted to the AEAT. The tax ultimately falls on the final consumer.
• Taxable persons: Any individual or legal entity carrying out an economic activity (business, professional, or artistic) is a taxable person for IVA purposes. Non-residents carrying out taxable activities in Spain must register for IVA through the Registro de Operadores Intracomunitarios (ROI) or appoint a tax representative.
• Territorial scope: IVA applies in mainland Spain and the Balearic Islands. The Canary Islands, Ceuta, and Melilla are outside the IVA system — they apply the IGIC (Impuesto General Indirecto Canario) and IPSI (Impuesto sobre la Producción, los Servicios y la Importación) respectively.

IVA Rates

• 21% — Standard (Tipo General): Applied to most goods and services: electronics, clothing, professional services (legal, accounting, consulting), motor vehicles, fuel, alcohol, tobacco, and entertainment. This is the default rate when no other rate applies.
• 10% — Reduced (Tipo Reducido): Applied to: (a) food products (except those at 4% — see below), (b) non-alcoholic beverages, (c) passenger transport (land, sea, and air), (d) hotel and tourism accommodation, (e) restaurant and catering services, (f) construction and renovation of housing, (g) water supply, (h) waste treatment, (i) cleaning of public roads, (j) certain medical equipment for people with disabilities.
• 4% — Super-Reduced (Tipo Superreducido): Applied to: (a) bread, milk, cheese, eggs, fruit, vegetables, cereals, potatoes — basic foodstuffs, (b) medicines for human use, (c) books, newspapers, and magazines (including digital editions), (d) vehicles for people with reduced mobility, (e) prosthetic and orthopaedic devices, (f) social housing (viviendas de protección oficial — VPO), (g) coffins and funeral services in some cases.

Exempt Activities

• Healthcare: Medical and healthcare services provided by licensed professionals (doctors, dentists, nurses) and hospitals are exempt from IVA. This includes diagnostic services, treatment, and preventive care.
• Education: School, university, and vocational education provided by public or recognised private institutions is exempt. Language academies and other private tuition not under the official education system are generally taxed at 21%.
• Financial and insurance services: Banking services (loans, deposits, payment transfers), insurance and reinsurance transactions, and the management of investment funds are exempt from IVA. Businesses providing these services cannot deduct input IVA on their purchases.
• Real estate: The sale of land and the rental of residential property (vivienda habitual) is exempt (with certain exceptions). Commercial property rentals are generally subject to IVA (and the landlord can opt to charge IVA on commercial premises).

E-commerce and OSS/IOSS

• OSS (One-Stop Shop): Spanish businesses selling goods online to consumers in other EU member states can use the OSS (Ventanilla Única) to declare and pay the IVA of the destination country in a single quarterly return to the AEAT. The OSS replaces the need to register for VAT in each EU member state.
• IOSS (Import OSS): For distance sales of imported goods valued at up to €150 to consumers in the EU, the IOSS allows the seller to collect IVA at the point of sale and remit it through a single monthly return. Goods with IOSS payment are released through customs without further IVA charges.
• Distance selling threshold: From July 2021, the EU-wide distance selling threshold is €10,000 for cross-border sales to consumers. If your sales to consumers in other EU states exceed this, IVA at the destination country rate applies.

Filing and Returns

• Quarterly filing (Modelo 303): Most SMEs file the Modelo 303 form quarterly (within 20 days after the end of each quarter — April, July, October, January). The form summarises output IVA, input IVA, and the resulting amount to pay or refund.
• Monthly filing: Large enterprises (turnover over €6,010,121.04) and companies subject to the SII (Suministro Inmediato de Información) or the REDEME (Registro de Devolución Mensual) must file monthly. Monthly filing also allows faster VAT refunds.
• Annual summary (Modelo 390): An annual summary of all quarterly/monthly IVA returns must be filed between 1 and 30 January of the following year.
• SII (Immediate Information Supply): Large businesses and those opting for monthly refunds must use the SII system, which requires submitting invoice records to the AEAT almost in real time (within 4 business days of issuance/receipt).

Intrastat and Intra-Community Operations

• Intra-Community supplies: Sales of goods to VAT-registered customers in other EU member states are zero-rated (exempt with credit) in Spain. The Spanish seller must: (a) verify the customer's valid VAT number via the VIES system, (b) issue an invoice without IVA, (c) include the sale in the Modelo 303 (Boxes 60–61), (d) file the Recapitulativa de Operaciones Intracomunitarias (Modelo 349) quarterly or monthly.
• Intra-Community acquisitions: Purchases of goods from other EU member states are subject to IVA in Spain via the reverse charge mechanism — the buyer self-assesses the output IVA and simultaneously deducts the input IVA (net effect is zero for fully taxable businesses).
• Intrastat: Businesses whose intra-Community trade exceeds €400,000 per year (arrivals) or €400,000 per year (dispatches) must file Intrastat declarations (the Estadística de Comercio Intracomunitario) — Modelo N-I and N-II forms.

Recargo de Equivalencia

• Retail surcharge regime: Retailers selling to the general public who are individuals (not VAT-registered businesses) may be subject to the Recargo de Equivalencia. Under this regime, the retailer does not charge IVA separately on invoices, but the supplier adds a surcharge to the IVA rate (5.2% on 21% goods, 2.6% on 10% goods, 1% on 4% goods) and the retailer cannot deduct input IVA. The annual turnover must not exceed €1,000,000 to qualify.
• Opting out: Retailers can opt out of the Recargo de Equivalencia if their turnover from non-final-consumer sales exceeds certain thresholds or if they are a manufacturer or wholesaler.

Penalties

• Late filing: Fines for late submission of IVA returns range from €150 (for voluntary late filing with no prior AEAT notification) to 50–150% of the tax due for late filing after AEAT notification.
• Incorrect returns: Errors in IVA returns attract penalties of 50–150% of the underpaid tax, plus late payment interest. Minor infractions (e.g., failing to issue invoices correctly) are fined at €150–€6,000.
• Fraudulent evasion: Intentional IVA evasion (e.g., issuing false invoices, concealing sales) above €120,000 can be prosecuted as a criminal offence with penalties including imprisonment (1–5 years) and fines of up to six times the defrauded amount.

FAQ

Do I need to register for IVA as a small business?

If your annual turnover is below certain thresholds and you operate a qualifying activity, you may not be required to register. However, unlike some EU countries, Spain does not have a general mini-one-stop-shop exemption for small businesses (the new EU SME scheme was transposed into Spanish law in 2025 with an optional exemption for businesses with turnover under €85,000, but it is not automatic — registration is recommended if you deal with other VAT-registered businesses).

What is the reverse charge mechanism?

The reverse charge (inversión del sujeto pasivo) shifts the obligation to account for IVA from the supplier to the customer. In Spain, the reverse charge applies to: (a) intra-Community acquisitions, (b) certain construction and subcontracting transactions, (c) the supply of real estate in execution of a court order, (d) supplies of certain telecommunications equipment and computer chips. The customer must self-assess IVA and simultaneously deduct it if they are fully taxable.

Can I claim a refund of Spanish IVA as a non-resident?

Yes, businesses established in another EU member state can claim a refund of Spanish IVA through the electronic VAT refund system (the EU refund portal). Businesses from non-EU countries can claim refunds via the Modelo 361 form, subject to reciprocity. Refund applications must be submitted by 30 September of the following year.

What is the difference between IVA and IGIC?

IVA applies in mainland Spain and the Balearic Islands. The Canary Islands have their own tax, IGIC (Impuesto General Indirecto Canario), with a general rate of 7% (lower than IVA). Ceuta and Melilla apply IPSI. Businesses moving goods between IVA territory and these territories must go through customs procedures.

Are digital services subject to Spanish IVA?

Yes, digital services (streaming, apps, e-books, online courses, software as a service) provided to consumers in Spain are subject to Spanish IVA at 21%, regardless of where the provider is established within the EU. Non-EU providers must register for IVA in Spain or use the Import One-Stop Shop (IOSS).

Disclaimer

This guide provides general information about Spanish IVA for the 2026 tax year. VAT rates, rules, and thresholds may change. The information does not constitute professional tax advice. Please consult with a qualified Spanish tax advisor or the Agencia Tributaria for advice specific to your business circumstances.