VAT in Spain (2025) – Rates, Rules, Filing, and Compliance Guide

VAT in Spain – 2025 Guide for Businesses

Value Added Tax in Spain was introduced on January 1, 1986. It is an indirect tax on the sale of goods and services. The tax will be collected at each stage of the supply chain and the final consumer will be the one who pays it. A business will charge VAT on its sales and will send the collected amount to the government.

Spain has a 21% standard VAT rate, with reduced rates of 10%, 4%, and a temporary 0% on basic food items. The VAT system will apply on the Spanish mainland and on the Balearic Islands. It will not apply on the Canary Islands or on the cities of Ceuta and Melilla. 

This blog explains everything you need to know about VAT in Spain. 

What is VAT in Spain?

Value Added Tax (VAT) in Spain is an indirect tax applied to the consumption of goods and services. It is charged at each stage of the production and distribution process. The final consumer will be the one who pays the VAT, but a business or a professional will collect and report it to the Spanish Tax Agency.

This tax will be charged when there is a delivery of goods or a service by a business or a professional, when there is an intra-EU acquisition of goods, or when goods are imported into Spain, even if the buyer is an individual.

VAT in Spain is regulated under Law 37/1992 and will apply only on the mainland and the Balearic Islands. It will not apply on the Canary Islands, Ceuta, or Melilla.

How VAT Works in Spain

VAT is a tax on the sale of goods and services in Spain. The final consumer will pay the VAT as part of the price, but the responsibility of collecting and reporting the tax will be on the business or the professional who makes the sale. They will collect the VAT from the customer and pay it to the Spanish Tax Agency.

This is how the VAT system works in Spain:

• A business will charge VAT on the sale of a product or a service. This is called output VAT.

• The same business will also pay VAT on the goods and services it buys for running the business. This is called input VAT.

• At the end of a tax period, the business will calculate the difference between the output VAT and the input VAT.

  • If the output VAT is more, the business will pay the difference to the tax authority.
  • If the input VAT is more, the business can ask for a refund or carry the amount forward to the next period.

  VAT Rates in Spain (2025)

  VAT Rate	Type	Applicable Goods and Services
  21%	Standard Rate	Most goods and services (e.g., clothes, electronics, fuel, professional services)
  10%	Reduced Rate	Food, water, public transport, hotel services, some medical products
  4%	Super-Reduced Rate	Bread, milk, eggs, fruits, vegetables, books, medicines, some housing
  0%	Temporary Rate	Basic food items like bread, milk, fruits, vegetables, eggs, cheese, and olive oil. These are temporary rates under special economic measures and may change by government decision.

Scope of VAT in Spain

VAT in Spain applies only in certain regions and follows specific territorial rules defined by law.

1. Where VAT Applies

VAT will apply on the supply of goods and services carried out within:

• The Spanish mainland (Peninsula)
• The Balearic Islands

These areas are called the territory of application of the tax (TAI). A business that operates in this territory will be required to apply VAT, as long as the legal conditions are met.

2. Territories Excluded from VAT

The following Spanish regions are excluded from the VAT system:

• Canary Islands
• Ceuta
• Melilla

Each of these areas has its own indirect tax system and they are treated as non-EU territories for VAT purposes.

3. Special Rules for Basque Country and Navarre

The Basque Country and Navarre have limited tax authority under special economic agreements.  A business that operates in both the common territory and either of these regions must follow these rules:

• If the business had less than €10 million turnover in the previous year, VAT is declared in the region where the tax address is located.
• If the turnover is €10 million or more, and operations are carried out in both areas, VAT must be reported in both territories, based on the share of operations in each.

4. Autonomous Communities

Even though 50% of VAT revenue is transferred to the Autonomous Communities, they do not have power to change VAT laws. All responsibilities for VAT registration, filing, and collection will remain with the State Tax Administration Agency (AEAT).

VAT Exemptions in Spain

In Spain, some goods and services will be exempt from VAT, which means no VAT will be charged on the invoice as defined under Article 20 of Law 37/1992, but the business may still need to register for VAT and file VAT returns.

Some common VAT-exempt categories include:

• Healthcare services provided by medical professionals or health institutions.
• Education and training offered by schools, universities, and certified institutions.
• Social services such as elderly care, childcare, and services by non-profit organizations.
• Financial and insurance services, including loans, credit, and certain banking operations.
• Cultural services like library access, some museum entries, and non-commercial events.
• Renting of residential properties (not applicable for short-term tourist rentals or commercial properties).
• Certain real estate transactions, such as the resale of used buildings (if specific conditions are met).

VAT Registration in Spain

If a business carries out taxable activities in Spain, it must register for VAT with the State Tax Administration Agency (AEAT). This applies to both Spanish and foreign businesses that sell goods or services in the Spanish VAT area.

To register, the business must fill out one of these forms:

• Form 036 – For VAT registration, changes, or cancellation
• Form 037 – A simpler version for individuals who meet certain conditions

After registering, the business will receive a VAT number (NIF-IVA). This number must be shown on all invoices and used for VAT returns.

Foreign businesses that are not based in Spain but carry out taxable operations may also need to register. In some cases, they must appoint a tax representative in Spain.

Registration must be done before starting business activities. If a business fails to register on time, it may face penalties or lose the right to claim VAT deductions.

VAT Return Filing in Spain

Businesses that are registered for VAT in Spain must file regular VAT returns to report the tax they charge on sales and the tax they pay on purchases. The process is managed by the State Tax Administration Agency (AEAT).

VAT Forms

Form	Purpose
Form 303	Regular VAT return for reporting VAT on sales and purchases
Form 390	Annual summary of all VAT operations for the year
Form 349	Declaration of intra-EU sales and purchases
Form 322	Monthly VAT return for individual entities in a VAT group
Form 353	Consolidated VAT return for VAT groups
Form 379	Report of cross-border payments by payment service providers
Form 036 / 037	VAT registration, modification, or cancellation
Form 361	VAT refund request for non-EU/non-resident businesses

Filing Frequency

• Quarterly filing: Most small and medium-sized businesses file Form 303 every three months.
• Monthly filing: Businesses in the Monthly Refund Register (REDEME) or with a turnover above certain thresholds must file monthly.

Deadlines

• Quarterly Form 303: Due on the 20th of the month following the end of each quarter.
• Monthly Form 303: Due on the 20th of the following month.
• Form 390: Due by January 30 of the following year.
• Form 349: Monthly or quarterly, depending on the volume of intra-EU transactions.
• Form 379: Filed quarterly, in the month following each quarter.

How to File VAT

All VAT returns in Spain must be filed electronically through the AEAT website using one of the following methods:

• A digital certificate
• The Cl@ve PIN system
• An electronic National ID (DNIe)

Steps to file VAT returns:

1. Log in to the AEAT website.
2. Select the correct VAT form (e.g. Form 303 for regular filing).
3. Enter the details of VAT collected (sales) and VAT paid (purchases).
4. Submit the return electronically.
5. If payment is due, choose a payment method such as bank transfer or direct debit.

The AEAT also offers a tool called Pre303, which allows you to pre-fill your VAT return using data from your digital VAT records.

VAT Payment in Spain

When the VAT collected on sales is more than the VAT paid on purchases, the business must pay the difference to the AEAT. This payment is made online after filing the VAT return.

There are several ways to pay:

• Direct debit 
• Online payment 
• Bank transfer
• In-person payment

The payment deadline is usually the 20th of the month after the filing period. If the deadline falls on a weekend or holiday, it moves to the next working day. 

Late payments may result in penalties or interest.

VAT Refunds in Spain

If a business pays more VAT on purchases than it collects on sales, it can claim a VAT refund from the AEAT.

VAT refunds can be requested in two main ways:

• Through Form 303 –
  If input VAT is higher than output VAT, the business can request a refund or carry the balance forward to the next return.
• Through Form 360 –
  Used to request an annual refund if the business does not claim refunds in each return.

For foreign businesses not based in Spain, a refund can be claimed using Form 361:

• EU businesses apply under the 8th Directive
• Non-EU businesses apply under the 13th Directive
• A tax representative in Spain may be required

To receive a refund, the business must:

• Be registered for VAT (if required)
• Hold valid invoices
• Meet refund deadlines and minimum amounts
• Not use the goods or services for exempt or personal use

Refunds are usually processed within four months but may take longer if the AEAT needs to review more details.

Record-Keeping Obligations

Businesses registered for VAT in Spain must keep proper records of their transactions. These records are needed to support VAT returns and may be checked by the AEAT.

Businesses are required to maintain the following:

• Invoices for sales and purchases
• Credit notes or corrections
• Import and export documents
• VAT books showing all issued and received invoices, investment goods, and EU transactions

These records must be kept in an organized and secure manner for at least 4 years.

Large businesses and those using the SII system must keep their VAT records online and send the information to the AEAT in real time.

If a business does not keep proper records, it may face penalties or lose the right to claim VAT deductions.

Special VAT Regimes in Spain

Spain has special VAT regimes for some types of businesses and sectors. These regimes will apply different rules on how to calculate and report VAT. They are made to make things easier or adapt to industry-specific needs.

1. Cash Accounting Scheme (RECC)

This regime will allow a small business to pay VAT only when it receives payment from the customer.

• It is optional
• A business can use this if its turnover is below €2 million
• The same rule must be used for all sales and purchases
• Input VAT can be claimed only after paying the invoice

2. Simplified Regime (Módulos)

This regime will apply to small businesses and self-employed people in sectors like transport or retail.

• VAT is not based on actual sales but on fixed data like the size of a shop or number of workers
• It can be used only for activities listed by law

3. Agricultural, Livestock and Fisheries Regime

This regime is for people who work in farming, livestock, or fishing.

• They will not charge VAT on sales
• Instead, they will get a fixed amount as compensation from the VAT-registered buyer
• It is made to simplify VAT in the agriculture sector

4. Travel Agencies Regime

This will apply to a travel agency that sells services by using other suppliers.

• VAT is calculated only on the profit margin, not on the full price
• Input VAT on travel services cannot be claimed

5. Used Goods and Art Regime

This regime is for dealers who sell second-hand goods, artwork, or collectibles.

• VAT will be charged only on the profit made
• It helps to avoid paying VAT more than once on the same goods

Conclusion

VAT in Spain is a part of the country’s tax system and will apply on the sale of most goods and services on the mainland and on the Balearic Islands. A business must follow the rules of VAT registration, invoicing, return filing, and record-keeping under Law 37/1992. These rules will be managed by the State Tax Administration Agency (AEAT).

Spain is also moving towards mandatory e-invoicing. E-invoicing is already required on sales to the public sector (B2G). It will soon be required on business-to-business (B2B) transactions. A business must prepare for this change to stay compliant.

We recommend using Flick E-Invoicing Software. It fully complies with Spanish VAT and e-invoicing rules. It will help with automation and reduce manual work.

If you have questions on VAT or e-invoicing in Spain, contact us sales@flick.network

FAQ

Who needs to register for VAT in Spain?

Anyone who sells goods or provides services in Spain needs to register for VAT.

When should I register for VAT?

You need to register before you start doing any taxable business in Spain.

What happens if I miss the VAT filing date?

You may get a penalty or need to pay some extra as interest.

What is Form 303 used for?

You use it to report VAT you collect on sales and VAT you pay on purchases.

Can I get a VAT refund if I pay more?

Yes, if your input VAT is more than output VAT, then you can ask for a refund.

Is invoicing mandatory in Spain now?

Yes, for B2G it has already started and B2B will become mandatory soon.