What is IVA in Spain? IVA or Impuestos sobre el Valor Añadido, put simply, is the UK equivalent of VAT and is applied to pretty much everything you buy
For many years, Spain has enjoyed some of the lowest rates of tax added to goods and services amongst it's fellow European states. The advantage of low taxation has boosted Spain's popularity as a value for money destination. However, on the July 11th 2012 Prime Minister Mariano Rajoy informed Parliament that a rate in IVA would be applied as from the 1st September. This could spell severe problems for businesses but more importantly families and visitors to Spain as they are all hit hard in the pocket reducing their spending power significantly.
There are a variety of IVA taxation rates in Spain which are applied to different goods and services, but are you aware of what the current rates of IVA are and to what goods or how they are applied...?
The 4% "Basic Rate"
This is applied to all items that are considered to be of basic and primary need. It includes :
- Bread, frozen dough, eggs, cheese, milk, beans and fruit and vegetables.
- Books, magazines, newspapers and Public Museum Entrance.
- Medicines ( NOT for Animals though )
- Vehicles for the disabled, wheel chairs and other transport for the disabled.
- Prosthetics and implants.
- Official protected housing.
The 10% "General / Standard Rate"
This is applied to :
- Foodstuffs in general (Excepting those in the 4% band)
- Soft drinks.
- Animals that are to be for human consumption or breeding.
- Agricultural products, farming and forestry activities, such as seeds and fertilisers.
- Contact lenses and glasses.
- Disabled lifts and products for the diagnosis of illnesses.
- Health assistance services, social services, and dental work.
- Imported artworks and antiques.
- The sale of property, including garages and annexes.
- House construction (between promoter and contractor).
- Services supplied by artists and technicians.
- Hotel and restaurants
- Cleaning of streets and public gardens.
- Refuse collection.
- Public transport and Motorway Tolls.
- e-books, DVDs, music CDs, as well as cinema and theatre tickets. *
- Sports, cultural and recreational services, exhibitions and fairs. *
* Moved from the lower 4% rate to the higher 21% in September 2012; then down to the 10% rate as from March 2015
The – 21% "Higher Rate"
This rate is the general rate, which is applied to all other products, including :
- Alcoholic drinks and tobacco
- Animals used in bullfighting
- Agricultural machinery.
- Devices for the diagnosis and monitoring of pregnancy.
- Television and radio services.
- Petrol & Diesel.
- Hairdressing *
- Funeral services *
*Moved up from the 4% lower rate to the 21% higher rate in September 2012