IVA is charged at 21% (from 1st September 2012) on most goods and services in Spain, but not everything gets hit with the full 21% and the situation is different for property.
Reduced rate ( 10% )
Sporting events of an amateur nature
Exhibitions and fairs
Health products and equipment
Non-basic food products and water
Rubbish collection and treatment
Super-reduced rate (4%)
Books, newspapers and magazines (Electronic equivalents are taxed at the full standard rate).
Basic foodstuffs (bread, milk, cheese, eggs, fruits, vegetables, cereals and potatoes)
Exempt from IVA
Education provided by the state or licensed bodies
Tutoring on subjects that are included in the curricula at all educational levels
Sporting services provided by public bodies or associations
Cultural services such as museums, libraries, seminars and conferences
Artists, writers, composers and translators of artistic and scientific work
IVA / VAT on property sales
New property sales are charged to IVA at the super-reduced rate of 4%, but will move to the reduced rate of 10% on 1 January 2013.
Sales of land for property development are charged at the full rate
Secondhand property sales also attract a tax that is generally between 6% and 8% currently, although this is not actually IVA but is a transfer tax called Impuestos sobre Transmisiones Patrimoniales (ITP).Â TheÂ ITP rate is not set at national level but rather autonomous community level.
Neither of these taxes is â€śstamp dutyâ€ť as we know it in the UK. There is a form of stamp duty in Spain called AJD (Actos Juridicos Documentados) on all notarisation of documents. AJD is only payable on land and new property sales. The rate is a minimum of 0.5% of the sale price but can be up to 1% if the autonomous region so decrees, and most do.
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