TAXES IN SPAIN: THE VAT. A GENERAL VIEW
TAXES IN SPAIN – FINANCIAL ADVISORS IN SPAIN
The VAT, “IVA” in Spanish, is the indirect tax with similar structure as in other European countries. These are the main features of this tax (updated 2021).
Which are the tax rates?
There are three tax in spain rates for VAT:
- 4% for some essential goods (bread, milk, etc.)
- 10% for some goods (food mainly) and some services (transport, construction, etc.)
- 21% as the general rate
There are some services that are tax exempt, mainly regarding health and education).
Anyway the VAT is a tax to be studied case by case, in order to be sure which tax rate you should invoice.
How should you prepare your VAT tax returns?
Mainly the declarations are prepared quarterly, deducting the VAT of incoming invoices from VAT of invoices issued. In case the balance at the end of the year is in favor of the company, it can be claimed to the Tax office.
When the revenues of the company are more than 6 Million euros per year, the company must prepare the declaration monthly.
Somes companies also can submit tax declarations if they want to claim the balance in favor after each month (eg companies with an important part of sales that are exports) instead of waiting until the end of the year.