Spain

The basics

Spain’s VAT system — known locally as Impuesto sobre el Valor Añadido (IVA) — operates across four rate tiers.

The standard rate of 21% applies to all taxable goods and services not covered by the reduced or zero categories. A first reduced rate of 10% covers a broad range of everyday services: hotel accommodation, restaurant and catering services, takeaway food, domestic passenger transport, bars, cafes, nightclubs, water supplies, and admission to certain cultural and sporting events.

A second reduced rate of 4% targets essentials — certain foodstuffs, pharmaceutical products, books, newspapers, and social services. Finally, a zero rate applies to intra-community supplies and international passenger transport.

Unlike the UK, Spain’s VAT rules remain fully within the EU framework.

Who needs to register

Spain operates with no registration threshold — resident and non-resident businesses alike must register as soon as they begin carrying out taxable activities. There is no minimum turnover to reach first.

Registration is required in a number of specific situations: making taxable supplies of goods or services within Spain, storing inventory there (including through Amazon FBA), carrying out intra-community acquisitions or dispatches, installing or assembling goods locally, or providing B2C digital services to Spanish customers without using the non-Union OSS scheme. Businesses exceeding the €10,000 EU-wide distance selling threshold must also register unless they opt into the OSS (One Stop Shop) scheme.

Applications go through the AEAT (Agencia Estatal de Administración Tributaria), which issues a Spanish VAT number (NIF-IVA) upon approval. The process typically takes two to four weeks, and additional documentation may be requested. Required documents generally include a completed Form 036, articles of association, proof of business activity, and ID for legal representatives.

Voluntary registration is also permitted — for instance, if a business wishes to recover Spanish input VAT.

Fiscal representation

Non-EU businesses are legally required to appoint a fiscal representative in Spain. This representative acts as a liaison with Spanish tax authorities, handles VAT return filings and correspondence, and carries joint liability for any VAT debts. EU-based companies are exempt from this requirement, though they may still choose to appoint a local representative for administrative convenience.

Filing, deadlines and penalties

Filing frequency is determined by annual turnover. Businesses with sales exceeding €6 million must file monthly returns, while those below that figure file quarterly. All VAT-registered businesses are additionally required to submit an annual VAT return, due by 30 January of the following year.

For monthly and quarterly returns, the deadline is the 20th of the month following the end of each accounting period. All filings must be submitted electronically.

Spain’s penalty framework is notably strict. Late payment triggers a 1% monthly surcharge on unpaid VAT, rising progressively to a maximum of 12%. Interest charges of 5%, 10%, or 20% apply depending on the length of delay, and non-filing or fraud can attract additional penalties. In serious cases, the Spanish tax authorities may suspend a business’s VAT number entirely.

Intrastat, reverse charge and the Canary Islands

Businesses moving goods between Spain and other EU member states must file Intrastat declarations once certain thresholds are crossed. The standard threshold stands at €400,000 for both arrivals and dispatches, while a more detailed return is required above €6,000,000. Submissions are due by the 12th of the month following the relevant transaction.

The reverse charge mechanism shifts VAT accounting responsibility to the recipient rather than the supplier in specific circumstances. These include B2B cross-border services, domestic transactions in sectors such as construction, waste, scrap metal, and gas and electricity, and certain intra-EU goods acquisitions. Under this arrangement, the recipient accounts for both input and output VAT on the same return — reducing the compliance burden on foreign suppliers who might not otherwise need to register.

Businesses operating in or selling into the Canary Islands face an entirely separate tax regime. The islands levy their own consumption tax — IGIC (Impuesto General Indirecto Canario) — which applies independently of mainland Spanish VAT. The standard IGIC rate is 7%, with reduced rates of 0% and 3% for essentials such as basic foods, books, and medicines, and increased rates of 9.5% and 15% for tobacco, alcohol, and luxury goods. Companies active in both mainland Spain and the Canary Islands must maintain compliance with both systems simultaneously.