Spain applies several different VAT rates depending on the type of goods or services being supplied.

Understanding the correct VAT rate is important for ensuring accurate invoicing, VAT reporting, and compliance with the Spanish Tax Authority (Agencia Tributaria).

📌 Standard VAT Rate

21% VAT

The standard VAT rate in Spain is 21%.

This rate applies to most goods and services, including:

• Consumer goods
• Electronics
• Household products
• Professional services
• Most retail and ecommerce sales
• Adult clothing and footwear

Unless a reduced rate, super-reduced rate, or exemption applies, the standard VAT rate should generally be used.

📉 Reduced VAT Rate

10% VAT

A reduced VAT rate of 10% applies to certain qualifying goods and services, including:

✔️ Restaurant and catering services

✔️ Hotel and tourist accommodation

✔️ Passenger transport

✔️ Certain pharmaceutical products

✔️ Certain agricultural products

✔️ Some residential property transactions

The application of the reduced rate depends on the specific goods or services being supplied.

📚 Super-Reduced VAT Rate

4% VAT

A super-reduced VAT rate of 4% applies to a limited range of essential goods and services, including:

✔️ Certain basic food products

✔️ Books, newspapers, and magazines

✔️ Certain medicines

✔️ Medical devices for disabled persons

✔️ Some social housing transactions

The availability of the super-reduced rate is subject to specific legal conditions.

🌍 Zero-Rated Supplies

0% VAT

Spain applies a 0% VAT rate to certain qualifying transactions.

Examples may include:

✔️ Exports of goods outside the European Union

✔️ Certain intra-EU supplies of goods

✔️ Specific transactions covered by special VAT provisions

⚠️ A zero VAT rate does not mean that the transaction is exempt from VAT.

Businesses making zero-rated supplies generally:

• Continue to report these transactions in their VAT returns
• Remain subject to VAT compliance obligations
• May still be entitled to recover VAT incurred on related business expenses

The availability of the 0% VAT rate depends on the nature of the transaction and the supporting evidence available.

🚫 VAT Exempt Supplies

Certain goods and services are exempt from Spanish VAT.

Examples may include:

✔️ Certain financial services

✔️ Certain insurance services

✔️ Certain healthcare services

✔️ Certain educational services

✔️ Certain property transactions

⚠️ VAT-exempt supplies are different from zero-rated supplies.

Businesses making exempt supplies may have restrictions on recovering VAT incurred on related purchases and expenses.

📋 Zero-Rated vs Exempt – What's the Difference?

This is one of the most common areas of confusion.

Zero-Rated Supplies

✅ VAT rate of 0%

✅ Treated as taxable supplies

✅ Generally allow recovery of related input VAT

✅ Must usually be reported in VAT returns

Exempt Supplies

🚫 No VAT charged

🚫 Not treated as taxable supplies for VAT recovery purposes

🚫 Input VAT recovery may be restricted or unavailable

Understanding the distinction is important because it can significantly affect the amount of VAT a business may recover.

⚠️ Important Information

📌 The correct VAT treatment depends on the specific goods or services being supplied.

📌 Similar products may be subject to different VAT rates depending on their characteristics and intended use.

📌 Supporting documentation should be retained when applying reduced rates, super-reduced rates, zero rates, or exemptions.

📌 Incorrect VAT treatment may result in additional VAT liabilities, interest, penalties, or compliance issues.

📌 VAT rates and qualifying goods or services may change as a result of legislative updates.

🤝 Need Help?

If you are unsure which Spanish VAT rate applies to your products or services, please contact your hellotax Account Manager.

Our VAT specialists can help determine the correct VAT treatment and support your ongoing VAT compliance obligations in Spain.