VAT Rates for Self-Employed Individuals and Businesses in 2025
Content:
What is VAT and how does it work?
Value Added Tax (VAT) is an indirect tax levied on the consumption of goods and services in Spain. According to Law 37/1992 , this tax applies to:
Deliveries of goods and services carried out by entrepreneurs or professionals.
Imports of goods , both by companies and individuals.
Intra-community acquisitions within the EU.
Businesses and self-employed individuals must collect VAT on their invoices and declare it to the Treasury.
VAT rates in force in 2025
In Spain, there are three types of VAT applicable depending on the nature of the good or service.
| VAT rate | % | Examples |
|---|---|---|
| General | 21% | Technology, clothing, cars, electricity. |
| Reduced | 10% | Transportation, hospitality, water, entertainment. |
| Super-reduced | 4% | Bread, milk, fruits, medicines, books. |
2025 Update : Temporary rates of 2% and 7.5% have been eliminated, restoring traditional rates.
Recent changes to VAT rates in 2025
As of January 1, 2025 , changes have been made to VAT taxation.
1. End of sales on basic foodstuffs
The super-reduced VAT rate of 4% is once again being applied to products such as bread, milk, and fruit.
2. Increase in VAT on electricity
Attention! Starting in January 2025, VAT on electricity bills will increase from 10% to 21% after the temporary reduction ends.
3. VAT reduction on olive oil
Good news : Olive oil is now taxed at 4% instead of 10%.
Are you significantly affected by these changes? Make sure to check the correct application of VAT on your invoices and purchases.
Obligations of Self-Employed Workers and Companies Regarding VAT
Both self-employed workers and companies must comply with the following tax obligations :
Charge VAT - Apply it to customer invoices.
Support VAT - Pay VAT on purchases from suppliers.
Declare VAT - Submit Form 303 quarterly or monthly
Exemptions and Non-Subject to VAT
Some transactions are exempt or not subject to VAT:
| Category | Examples |
|---|---|
| Exemptions | Medical services, education, insurance. |
| No restraint | Business transfer, non-profit services. |
Do you have questions about whether you should apply VAT to a service? In this article, we explain how to create VAT-free invoices.
How to stay informed about regulations?
Tax legislation is constantly changing, so it is key to:
Consult official sources , such as the BOE and the Tax Agency .
Read updated expert blogs to always know the latest developments .
Ask expert advisors your questions to avoid mistakes and optimize your tax situation.
Optimize your VAT with InnoTaxes!
Avoid penalties and save on your VAT returns . At InnoTaxes , we help you manage your taxes properly.
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