VAT Spain Guide

Read our guide and find out everything you need to know about VAT in Spain, from registration to filing, and more.

Planning a business expansion into Spain? Then you probably know that includes, in most cases, registering for VAT in Spain. It can be a complicated process, though, particularly for the uninitiated. Read on to learn more about Spanish VAT rules and how they affect your business activity in Spain.

What is the VAT rate in Spain?

VAT in Spain is known as Impuesto sobre elValor Añadido (IVA). If your business meets certain criteria you will be required to obtain a Spanish VAT number and declare and pay VAT locally. There is a standard Spanish VAT rate of 21%, two reduced rates of 10% and 4%, and also a zero VAT rate.

Type of VAT	VAT Rate	Applicable Goods/Services
Standard VAT rate	21%	All other taxable goods and services.
Reduced VAT rate (1)	10%	Includes hotel accommodation, restaurant and catering services, takeaway food, admission to certain cultural and sporting activities, domestic passenger transport, bars, cafes, nightclubs, and water supplies.
Reduced VAT rate (2)	4%	Certain foodstuffs, pharmaceutical products, books, and newspapers, as well as social services.
Zero VAT rate	0%	Intra-community supplies and international passenger transport.

Registering for VAT in Spain

Whether your business is resident or non-resident, there is no minimum threshold for VAT registration in Spain.

Businesses must register for VAT when the total threshold of €10,000 for intra-community distance selling is exceeded and they have not chosen to pay the VAT in Spain via the One Stop Shop. This threshold became EU-wide on July 1, 2021. They also must register if they are restoring products in Spain or participating in an FBA(Fulfilled-by-Amazon) program that includes Spain.

Businesses can register for a Spanish VAT number with the Administración de la Agencia Estatal de AdministraciónTributaria (AEAT). Once your application is submitted it can take up to 4 weeks to receive your VAT number.

Fiscal representative Spain

Non-EU businesses selling in Spain who are VAT registered as non-resident are required to appoint a fiscal representative. This representative will be jointly liable for the Spanish VAT.

Spanish VAT return filing and penalties

Your company’s annual sales amount will determine how frequently you file a Spanish VAT return. VAT returns must be filed electronically.

Submit a monthly return if your annual sales totaled more than €6 million.
Submit a quarterly return If your annual sales were less than €6 million.
All VAT-registered businesses are also required to file annual VAT returns.

Spanish VAT returns must be submitted by the 20th of the month following your accounting period. The deadline for submitting annual VAT returns is January 30th of the following year.

Missing VAT filing and payment deadlines in Spain will result in penalties, which is why having a tax representative is recommended. They will ensure that all Spanish VAT responsibilities are met.

Fines for late submission are added as a percentage of the Spanish VAT due, starting at 1% in the first month with an additional 1% being applied for each month thereafter up to the 12th month. For late payments, the interest applied is 5%, 10%, or 20% depending on the payment delay.

Spanish Intrastat declarations

Intrastat applies to both resident and non-resident companies in Spain. Intrastat returns must be filed by the 12th of the month. Late filing may incur a penalty. The annual threshold for filing a standard Intrastat return is €400,000 (arrivals/dispatches) and €6,000,000 for a detailed Intrastat return (arrivals/dispatches).

Reverse charge in Spain

In Spain, the reverse charge mechanism shifts the responsibility for reporting and paying VAT from the supplier to the recipient of certain goods or services. The recipient must account for both the input and output VAT on their VAT return, rather than the supplier charging and remitting the tax. Under these circumstances, the foreign supplier doesn’t need to be VAT-registered in Spain.

IGIC Tax in the Canary Islands

The Canary Islands operate a distinct tax regime separate from Spanish VAT, known as IGIC (Impuesto General Indirecto Canario). IGIC is applied to the supply of goods and services within the Canary Islands and imports into the region. The standard IGIC rate is 7%, though reduced rates (0%, 3%, 9.5%, or 15%) apply to specific goods and services.

Registering for IGIC

‍Businesses that carry out taxable activities in the Canary Islands must register for IGIC with the Canary Islands Tax Agency (Agencia Tributaria Canaria). Non-resident businesses may also be required to register if they engage in economic activities subject to IGIC.

Filing IGIC returns

‍IGIC returns are typically filed quarterly, though businesses with higher turnover may need to file monthly. The deadlines for filing and paying IGIC are similar to Spanish VAT deadlines but must be submitted directly to the Canary Islands Tax Agency.

Differences between VAT and IGIC

‍While IGIC functions similarly to VAT, it is managed independently and applies only within the Canary Islands. Businesses operating in both mainland Spain and the Canary Islands must ensure compliance with both VAT and IGIC regulations.