⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer
Spain's VAT (IVA) has three rates: 21% general, 10% reduced, and 4% super-reduced. Consumers pay it folded into the price; businesses collect it on sales, deduct the VAT they paid on business purchases, and remit the difference. If you are self-employed (autónomo), you settle this quarterly with Modelo 303.
The three rates
21% — general rate. The default for most goods and services: clothing, electronics, cars, furniture, telecom and streaming services, phone and internet bills, and most professional and business services. (Restaurants, by contrast, are 10%.)
10% — reduced rate. Most food and drink, restaurant and bar services, hotels and tourist accommodation, passenger transport, cinema and theatre tickets, museums, and cultural or sporting events.
4% — super-reduced rate. Basic foodstuffs (bread, milk, eggs, cheese, fruit, vegetables, legumes, cereals), books, newspapers and magazines, medicines for human use, and vehicles and aids for people with disabilities.
When in doubt, 21% is the answer — the reduced rates are exceptions carved out by law.
Exempt sectors: no VAT charged, but no VAT recovered either
Some activities are exempt: healthcare, education, financial services, insurance, and residential rentals, among others. Exempt businesses do not charge VAT on their sales — but they also cannot deduct the VAT they paid on their purchases, which becomes a real cost. This is why exemption is not always a benefit.
The Canary Islands, Ceuta and Melilla play by different rules
The standard IVA does not apply in the Canary Islands (which have their own IGIC, general rate 7%), nor in Ceuta and Melilla (which apply the IPSI). If you do business there — or sell into those territories from the mainland — the rules change.
Modelo 303: the autónomo's quarterly VAT return
If you are autónomo (or a company) in the general VAT regime, you file Modelo 303 every quarter, entirely online:
Quarter
Period
Filing window
Q1
January – March
1 – 20 April
Q2
April – June
1 – 20 July
Q3
July – September
1 – 20 October
Q4
October – December
1 – 30 January
You report the VAT you charged customers (IVA repercutido) minus the VAT you paid on business expenses (IVA soportado), and pay the difference — or carry forward a credit if you paid more than you charged. If the last day falls on a weekend or holiday, the deadline moves to the next working day. In January you also file Modelo 390, the annual VAT summary. Miss a deadline and surcharges apply, so most autónomos let their gestor handle the calendar.
Frequently asked questions
Do I charge VAT to clients outside Spain?
It depends. Sales to businesses in other EU countries are generally zero-rated under the reverse-charge mechanism (you need a valid EU VAT number for both parties); sales to consumers follow distance-selling rules; exports outside the EU are generally exempt. Get the invoicing right from the start.
I am an autónomo with only foreign clients. Do I still file Modelo 303?
Usually yes — even with zero domestic VAT, the return documents your deductible input VAT and keeps you compliant. Skipping quarters because "nothing happened" is a classic beginner mistake.
Can I deduct VAT on everything I buy?
Only on purchases directly linked to your business activity, with a proper invoice (factura) showing your NIF — not a simple receipt (ticket). Mixed personal/business use gets complicated; the deductible portion must reflect business use.
What is the difference between Modelo 303 and Modelo 390?
Modelo 303 is the quarterly settlement where money moves. Modelo 390 is the annual summary filed in January, recapping the whole year — no payment, just information.
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