Wednesday. 08.02.2023
TAXATION

VAT rates in Spain: Products with reduced or super-reduced taxes

Most of the goods and services sold in Spain are subject to the general VAT rate of 21%
A woman shopping for groceries. Photo: Pexels.
A woman shopping for groceries. Photo: Pexels.

The Value Added Tax (VAT) in Spain has experienced a notable rise in the past decade as a result of the financial crisis, which forced successive governments to increase tax revenues.

In 2010, the general rate of VAT (IVA, for its acronym in Spanish), which is the main tax levied on consumption and paid by all consumers each time they buy a product or service, went up from 16% to 18% in Spain. And three years later, in 2013, it rose gain from 18% to the current 21%.

Most of the goods and services marketed in Spain fall into this group, the general VAT rate of 21%.

Despite these increases, Spain retains two special VAT rates, much lower, which are levied on certain goods or services, labeled as basic or essential by the authorities.

Thus, Spanish consumers pay for certain products a reduced VAT rate of 10% (in 2010 it was raised from 7% to 8% and in 2013 from 8% to 10%) or a super-reduced rate of 4%.

The list of products and services included in each Spanish VAT category has changed in recent years.

For example, hairdressing services that were previously subject to reduced VAT rate (10%) are now affected by the general VAT rate (21%). Since 2020, newspapers and magazines are no longer subject to the reduced VAT rate (10%) and are now taxed with the super-reduced rate (4%).

Products with reduced VAT rate (10%)

  • Food products intended for human or animal consumption (with the exception of alcoholic beverages, to which general VAT is applied).
  • Goods or services related to forestry, livestock or agricultural activities (fertilizers, seeds, herbicides).
  • Water (for drinking or irrigation).
  • Devices intended to replace physical deficiencies (glasses, contact lenses, prostheses)
  • Products, equipment, instruments and sanitary materials intended for the treatment, prevention or diagnosis of diseases (including medicines for use in animals and pharmaceutical products for direct use without medical prescription).
  • Real estate sales, renovations or repairs (homes, garages, annexes).
  • Real estate leases with option to purchase.
  • Transportation of travelers and their luggage (by road, sea or air).
  • Hotel and restaurant activities, including all food and drink supplies.
  • Activities of health and dental care.

Products with super-reduced VAT (4%)

  • Basic food products: bread, flour, milk, eggs, cheese, fruits, vegetables, cereals, tubers and legumes.
  • Medicines intended for human use, as well as medicinal substances and all the intermediate products used to obtain them.
  • Press and books with non-exclusively promotional or advertising content.
  • Motor vehicles intended for the use of people with reduced mobility.
  • Prosthetics and internal implants for people with physical disabilities.
  • Subsidized housing (VPO, in Spanish), including rental operations with option to purchase.
  • Home assistance services, residential care and daycare centers.

VAT rates in Spain: Products with reduced or super-reduced taxes
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