What is IVA and when does it apply?
IVA stands for Impuesto sobre el Valor Añadido – it’s Spain’s Value Added Tax (VAT). The standard rate is 21%, and it’s added to most goods and services sold within Spain. There are also reduced rates of 10% and 4% for specific categories (like food, books, or health-related products), and some services are exempt altogether – like medical care, education, and some financial services. As an autónomo, you’re usually required to add 21% IVA to your invoices unless your activity is exempt or you’re billing someone in a situation that qualifies for a waiver.Which invoices need IVA?
You must include IVA on your invoices if:- You’re doing a taxable activity (most professional, commercial, or service activities)
- You’re billing a client in Spain
- You’re not exempt under the law (e.g. you’re not a doctor or tutor doing recognised educational services)
- You’re providing a service that is legally exempt (like certain educational or health-related services)
- You’re billing a client outside the EU (export of services — normally IVA-exempt)
- You’re billing a VAT-registered business within the EU under the reverse charge system
- You’ve registered for the special VAT exemption regime (régimen de recargo de equivalencia) used in some retail cases (less common for freelancers)
IVA conditions and responsibilities
If you’re charging IVA, you’re also responsible for:- Quarterly VAT declarations using Modelo 303, where you report the IVA you’ve charged vs. the IVA you’ve paid on your own business expenses
- Annual summary using Modelo 390
- Including your NIE (or NIF) on any invoice where you want to claim back IVA on business expenses
- Keeping correct records of all income and expenses for inspection
