IVA (Impuesto sobre el Valor Añadido) is Spain's value-added tax, equivalent to VAT in the UK or TVA in France. As a business or self-employed professional, you act as a tax collector on behalf of the AEAT: you charge IVA to your clients, collect it, and then pay the net amount (IVA collected minus IVA you have paid on purchases) to the tax authority every quarter.
Understanding IVA is fundamental to invoicing correctly in Spain. Applying the wrong rate — or failing to state IVA at all — can result in invalid invoices, disallowed VAT deductions for your clients, and AEAT sanctions.
The Three IVA Rates in Spain
21% — Tipo General (General Rate)
This applies to most goods and services not specifically listed under a reduced category. When in doubt, 21% is the default rate. Common examples:
- Professional services (consulting, legal, accounting, IT, design)
- Electronics and appliances
- Clothing, furniture, and most retail goods
- Advertising services
- Financial and insurance services (unless exempt)
10% — Tipo Reducido (Reduced Rate)
Applies to goods and services considered essential or socially important:
- Passenger transport (taxis, trains, airlines, buses)
- Hotel accommodation and restaurants
- Construction and renovation of residential buildings
- Entrance fees to cultural and sports events
- Water supply
- Processed food not in the super-reduced category
- Medicines for human or animal use (non-exempt)
4% — Tipo Superreducido (Super-Reduced Rate)
Reserved for the most basic necessities:
- Bread, flour, cereals, milk, cheese, eggs
- Fruits, vegetables, legumes (natural, unprocessed)
- Books, newspapers, and magazines (print editions)
- Prescription medicines
- Vehicles and prosthetics for disabled people
- Social housing sold by developers
IVA Exemptions (Operaciones Exentas)
Some transactions are completely exempt from IVA — meaning no IVA is charged and the client cannot deduct any IVA. Exempt activities include:
- Medical and healthcare services by licensed practitioners
- Educational services by recognised institutions
- Financial services (loans, bank accounts, most insurance)
- Intra-community supplies to VAT-registered EU businesses (0% with reverse charge)
- Exports outside the EU (0% zero-rated)
- Property lettings for residential use
- Postal services from Correos
When issuing an exempt invoice, you must explicitly state the legal basis for the exemption on the invoice (for example: "Exento de IVA según Art. 20.Uno.3 LIVA" for medical services).
Intra-Community Transactions
When you supply services to a VAT-registered business in another EU country, the supply is generally subject to the reverse charge mechanism: the client accounts for the VAT in their own country, and you issue an invoice at 0% IVA. You must include both your NIF-IVA (with the ES prefix) and the client's EU VAT number on the invoice, and report the transaction on Modelo 349 (the recapitulative statement for intra-community transactions).
How to Show IVA on a Spanish Invoice
A compliant invoice must separately state:
- Base imponible — the net amount before tax
- Tipo impositivo — the IVA rate (e.g., "21%")
- Cuota de IVA — the euro amount of IVA (base × rate)
- Total factura — base imponible + IVA (minus any IRPF retention if applicable)
If an invoice contains lines with different IVA rates (for example, some items at 21% and some at 10%), each rate group must be listed separately.
Quarterly IVA Filing: Modelo 303
Every quarter, you must file Modelo 303 — the quarterly IVA self-assessment. You declare:
- IVA devengado (IVA you charged clients) — the output tax
- IVA soportado deducible (IVA you paid on purchases) — the input tax
- Diferencia (difference) — if positive, you pay the AEAT; if negative, you can carry it forward or request a refund
Filing deadlines: April 20 (Q1), July 20 (Q2), October 20 (Q3), January 30 (Q4). Late filing incurs automatic surcharges.
At year end, you also file Modelo 390 — the annual IVA summary — which reconciles all four quarterly returns.
Recargo de Equivalencia
Retailers who buy goods for resale to final consumers without any processing may be subject to the recargo de equivalencia surcharge. In this regime, your supplier charges you both the standard IVA rate plus a surcharge (e.g., 5.2% extra for the 21% rate), and you are then exempt from filing quarterly Modelo 303. This regime is compulsory for qualifying retailers and cannot be opted into or out of freely.
How Facturi Handles IVA
Facturi stores your default IVA rate in your organisation settings and lets you override it per invoice line. The system calculates base imponible, IVA amount, and total automatically. For organisations filing quarterly, the invoicing data feeds directly into the tax form summary so that Modelo 303 preparation becomes a matter of reviewing numbers, not recalculating them from scratch.