What is IVA in Spain and what rates apply

What is IVA?

IVA (Impuesto sobre el Valor Añadido) is value added tax, the Spanish equivalent of VAT. It is governed by Ley 37/1992. Under Article 4, the tax applies to supplies of goods and services made for consideration by businesses or professionals within the territory where the tax applies, whether occasionally or regularly [1]. The law also treats as a business anyone who regularly earns income from letting property: Article 5 names landlords expressly [1].

Territory where it applies: Spain, including its islands and territorial waters, but excluding the Canary Islands, Ceuta and Melilla (Article 3) [1]. Other indirect taxes apply there.

What IVA rates apply in Spain?

There are several rates. The standard 21% rate under Article 90 applies to everything not listed in Article 91. The reduced rates of 10% and 4%, as well as 0%, are listed in Article 91 [1]. The AEAT, on a page updated on 2 June 2026, gives the same four figures and keeps an annual list of transactions for each rate [2].

In 2026, temporary reduced rates with a limited duration were introduced for energy and fuel. The AEAT publishes the current list by rate in the PDF “Tipos IVA 2026” [2]. Do not rely on the table above for a specific transaction: the rate depends on the goods or service and the terms of supply.

Who pays IVA and who files it?

The end consumer pays: the tax is included in the price or added to it on the invoice. The person liable to the state (sujeto pasivo) is the business or professional who carries out the taxable transaction (Article 84) [1]. They charge IVA to the buyer (repercute), deduct the IVA they themselves paid to suppliers (Article 92), and pay the difference to the Treasury [1].

Reporting is done by the business. Quarterly modelo 303 returns are filed from 1 to 20 April, July and October, and for the fourth quarter from 1 to 30 January. Monthly returns are filed from 1 to 30 of the following month, and for January by the end of February. If the last day of the deadline is a non-working day, the deadline moves to the next working day [3]. More on how this works for the self-employed: IVA and modelo 303 for freelancers.

What is exempt from IVA?

Article 20 lists the transactions exempt from the tax. They include healthcare and medical services (points 2 and 3), education of children and young people, school, university and language teaching, subject to conditions (point 9), and the letting of buildings used exclusively as housing (point 23) [1].

From 01.12.2026, Real Decreto-ley 29/2026 amends Articles 20 and 91: renting a furnished flat or house to a single tenant for no more than 30 nights, when it is not the landlord’s own main home, is no longer exempt and is taxed at 10%. From the same date, the 10% rate applies to renovation work on homes, including homes let as the tenant’s main residence, on the terms of Article 91.Uno.2.10.º [4].

What does this answer not cover?

We do not cover where a transaction takes place for services to clients in other countries (Articles 69 and 70), small business schemes or trade with other EU countries: the answer depends on your situation, so consult a gestor. IVA is a consumption tax; it does not replace IRPF and is not linked to your tax residence. More about IRPF: what is IRPF.

If you are planning to move and work in Spain, the general procedure is described on the page Residence permit in Barcelona, and for remote work there is the DNV route card. On a company’s IVA and tax on its profits: SL taxes: profit and IVA; the number under which the tax authorities know you is explained in the article what is a NIF.

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ReloVictory · Sources reviewed 02.10.2026 · Not a substitute for individual legal advice.