If you’re running a business or freelancing in Spain, figuring out how much Value Added Tax (VAT, or IVA) to charge can feel like a moving target. Do you always charge 21%?
The short answer: No.
Whether you need to charge VAT—and how much—depends entirely on who your customer is and where they are located. Here is a clear breakdown of how Spanish VAT applies to your invoices based on your client’s profile.
1. Customers Located in Spain
This is the simplest scenario. If your client is based in Spain, the rules are uniform across the board:
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Business (B2B): Charge 21% Spanish VAT.
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Private Individual (B2C): Charge 21% Spanish VAT.
If you have been invoicing Spanish clients and applying 21% VAT all along, you’ve been doing it correctly.
2. Customers Located in Another EU Country
When dealing with clients inside the European Union (outside of Spain), the rules split based on whether your client is a registered business or an individual consumer.
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Business (B2B) with a valid EU VAT number: Charge 0% VAT.
This falls under the Reverse Charge mechanism. When issuing the invoice, you must include a specific legal note, such as:
“Reverse charge – Article 196 of Council Directive 2006/112/EC.”
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Private Individual (B2C): Generally, you will charge 21% Spanish VAT.
Note: There are specific exceptions to this rule, particularly regarding digital services and distance sales under OSS (One Stop Shop) rules.
3. Customers Located Outside the EU (Non-EU)
Invoicing clients outside the European Union (such as in the US, UK, or Latin America) generally moves your services outside the standard VAT framework.
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Business (B2B): Typically 0% VAT (considered outside the scope of Spanish VAT, depending on the nature of the service).
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Private Individual (B2C): In many cases, 0% VAT applies to services rendered to individuals outside the EU, though this can vary depending on the specific type of service provided.
Summary Checklist for Your Invoices
| Client Location | Client Type | VAT Rate | Notes / Requirements |
| Spain | Business or Individual | 21% | Standard Spanish VAT applies. |
| EU (excl. Spain) | Business (B2B) | 0% | Requires valid EU VAT number + Reverse Charge clause. |
| EU (excl. Spain) | Individual (B2C) | 21% | Standard rate applies (exceptions for digital/OSS sales). |
| Non-EU | Business or Individual | 0% | Generally outside the scope of Spanish VAT. |
Need Help Clarifying an Invoice?
Every business is a bit different, and edge cases—like digital products, specialized consulting, or mixed services—can affect your tax obligations.
If you are ever unsure about how to invoice a specific client, keep these three details handy before reaching out to your tax advisor:
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The client’s country of origin
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Whether they are a registered business or a private individual
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The exact nature of the service you are providing
Disclaimer: Tax regulations can vary based on specific service types and changing cross-border regulations. For personalized tax guidance tailored to your specific situation, contact the team at Tax and Law Spain.
