VAT in Spain

1. What is the VAT in Spain?

The VAT rate in Spain is 18% since 2010. However, reduced rates of 8% and 4% apply to certain goods and services. The purchase of newly built properties, hotels and restaurants are subject to a VAT rate of 8%, as well as health products, and entertainment. The 4% VAT rate applies to food, newspapers and books. In addition to that, financial and insurance services, together with dentist and doctor fees are exempt from VAT.

2. How can I get a VAT refund in Spain?

The Value Added Tax can be recovered in Spain, provided that the company proves the business is subject to VAT taxation. In order for a company to obtain the VAT refund, the owner must sign an application containing original invoices which must be submitted to the Spanish tax authorities. The minimum amount should be no less than 200 euros. The deadline for filling the refund application is 6 months after the end of the year. Usually, you will receive the refund within 3 months by bank transfer.

3. How can I register for VAT in Spain?

There are many reasons for which a company benefits from VAT registration in Spain, including claiming VAT refund, importing goods etc. Also for companies that sell products or services VAT registration in Spain is mandatory. The process of registration can be done by the company legal representative. An application must be sent to the Tax Authorities along with the name certificate of the company, the bank deed certifying the minimum capital has been deposited, the registered address of the company and identification card, or power of attorney of the representative. Documents may need to be translated into Spanish and stamped  with the Hague Apostille. Usually, the VAT number is issued in 24 hours.

4. How does intra-community VAT work in Spain?

You may not need to charge VAT for a transaction with another company in EU if it forms an intra-community supply between entities that have been registered in the EU Register, known as VIES (VAT Information Exchange System). If a company appears in this register, then it does not have to include VAT on the invoice for transactions between companies in EU Member States. There are also cases when you have to register in the EU country where the other company is in order to charge VAT at the rate of that country.