VAT Registration in Spain

Companies need to register for VAT (IVA) purposes with the local tax authorities in Spain and they have to take the necessary measures so that their business complies with the tax regulations in their business field. Our team of specialists in company formation in Spain can advise on the tax registration procedures that are applicable to the VAT in Spain. Investors can obtain consultancy services from our specialists that are related to all the corporate taxes that have to be paid by local businesses. 

VAT rates (IVA tax in Spain)

The Spanish value-added tax has a standard value of 21% for most goods and services, but reduced rates of 10% and 4% also apply. 10% reduced VAT applies for passenger transport, certain plants, amateur sports, and events. There are also VAT updates in Spain for 2025, and here are the main changes:

• VAT for basic products like bread, milk, eggs, vegetables, fruits, and cereals has increased from 2% to 4%.
• VAT for pasta and seed oils in 2025 has increased from 7.5% to 10%.
• The VAT for olive oil has increased to 4% in 2025.
• VAT for energy in Spain has increased from 10% in 2024 to 21% in 2025.
• In Spain there is also an electricity tax, in addition to VAT, of 5.113% calculated on the power capacity and consumption.
• In 2025, VAT will remain at 10% for residential and hotel accommodation services, as well as passenger transportation, medicine, and water services.
• 0% VAT applies to exports and intra-community movements of goods in Spain in 2025.

Because the law modifies, it is best to collaborate with our team of accountants in Spain if you have a business here. This way you can ensure the VAT-related matters are understood and well implemented in the business’s daily operations.

What should Spanish businesses do once they are registered for VAT?

Businessmen who want to open a company in Spain in 2025 should know that once their business is registered for VAT purposes, specific procedures must be completed. Our consultants in company incorporation in Spain can offer step-to-step advice on the following procedures, which must be completed by all VAT payers in this country: 

• issue invoices specifying the disclosure details, as per the Spanish tax legislation;
• issue electronic invoices containing specific aspects, such as the electronic signature;
• keeping and maintaining the company’s accounts and records, for a period of 10 years;
• issue invoices for customers buying goods or services in Spain;
• process credit notes and use the correct foreign currency rates. 

What types of entities should register for IVA tax in Spain? 

As a general rule, commercial entities obtaining taxable income from the sale of goods and services in Spain are required to register for VAT. Below, we present the main categories of commercial entities that have to apply for a VAT number in order to pay VAT in Spain:

• companies importing goods on the Spanish territory, even in the case in which the goods are to be sold on another EU market;
• entities selling goods or services (and entities purchasing goods and services) that are not Spanish companies that were issued with a VAT number;
• the sale of goods and services through the internet is also charged with the VAT;
• companies storing goods in warehouses in Spain, as these premises are considered permanent establishments;
• companies organizing live events and exhibitions which charge admission fees to such events. 

Those entities that are liable for the payment of VAT should take the necessary measures in order to register for the payment of this tax. This is also necessary for foreign entities selling goods on the Spanish market. As a foreign trader, VAT registration in Spain in 2025 is done by completing Form 036, a document that must be signed and submitted. This can be done in person or by accessing the online platforms of Spanish tax institutions. 

Documents to be completed by Spanish VAT payers 

Businessmen who want to open a company in Spain that is charged with the VAT should also be aware of the fact that if they have obtained their VAT number, additional requirements, other than the ones mentioned above, must be completed. In this sense, the company may need to complete the EC Sales List, a document that is also requested for the sale of services, not only for the sale of goods.

This document is generally requested if a Spanish company that was issued with a VAT number makes an intra-community supply. This document has to be completed on a monthly basis and it must be submitted to the local Spanish authorities. It is legally required to submit this document on a monthly basis as long as the value of the products is above EUR 35,000. In the case in which it is below this value, then the document can be submitted on a yearly basis. 

What are the VAT regulations for Spanish sole traders? 

One of the ways to carry a commercial activity in Spain is by opening a sole trader. Since the sole trader does not represent a separate legal entity that its owner, the tax requirements and tax compliance measures are different than in the case of corporate entities. Sole traders in Spain that develop a taxable activity are thus, required to register for taxation, including for VAT. 

The VAT registration in Spain in 2025 is compulsory for a sole trader if the services or the products sold by the company’s owner are liable for VAT. If so, the Spanish sole trader should prepare specific documents necessary for the payment of the VAT and submit them on a quarterly basis. If the sole trader is liable for various taxes, including for VAT, it must be registered with the Spanish Tax Office (Agencia Tributaria). 

The video below offers more details on the IVA tax in Spain:

When should a company appoint a tax representative in Spain? 

A foreign company selling products or services in Spain must also appoint a tax representative in specific situations. Those opening a company in Spain should be aware that the tax legislation in Spain requires companies to have a tax representative in this country. The procedure does not apply to entities that are tax residents in one of the EU member states, but it is compulsory in the case of entities outside the EU. However, the procedure is not necessary in the case of entities registered in one of the following: Melilla, the Canary Islands, or Ceuta. 

The procedures for appointing a tax representative in Spain have to be completed prior to engaging in any financial transactions in this country. The Spanish Tax Administration must be informed on the identity of the tax representative during the formalities for VAT registration in Spain and the basic condition to appoint a tax representative is that the respective person must have his or her domicile in this country. 

Setting up a company in Spain also requires tax registration. If you would like to perform all the registration procedures, please contact our Spanish agents and find our more about the procedures involved. We can guide you step by step in opening a company in Spain in a fast and reliable manner.