VAT in the EU: Spain
Leaving VAT on the table: Focus on Spain
Spain is the second most visited country in the world and a major hub for international meetings and conferences.
In this post, we discuss business tourism and reclaiming VAT in Spain. Keep in mind that regulations may change depending on if you are an EU-based company or not. If you run a company that has as few as two but as many as 50 executives travelling on business at any point, and you don’t always succeed in recovering VAT – then hold off on your siesta, because we have a few tips for you.
Spain is the world’s fifty-second largest country and Europe’s fourth largest country, presenting a convergence of language, commerce, history and culture. Known for its exquisite tapas and wine, dramatic flamenco dancing and bullfights, it’s interesting to note that Spain is also ranked third among the countries hosting international conventions.
In the second place worldwide for number of business tourists overall, Spain hosts more than a million business tourists at 800 international conventions annually. The majority of business conventions are held in Barcelona, and that city holds over 580 congresses and events every year. Madrid alone, however, hosts over 317 thousand delegates at congresses annually, representing 15% of all tourists visiting the city.
The country boasts 4,595 companies in the convention and trade fair organization sector. Over the past few years the Madrid City Council, the Madrid Visitors & Convention Bureau along with 200 partners companies, have promoted a comprehensive media campaign encouraging congresses and corporate events. Madrid now holds the 4th position in the ICCA (International Congress and Convention Association) ranking for international conference venues.
So with all of this business travel, just how many of those delegates submit documentation for VAT returns? Each year, over $20 billion of unclaimed VAT is left on the table – mostly due to unawareness, the need for manual upkeep and an overall lack of expense control and transparency within organizations. But today there are automated, technologically-advanced processes for filing and reclaiming VAT, which are as simple as pressing a button.
Since Spain is a member of the EU, (in addition to the UN, the Eurozone, the Council of Europe, the OECD, and NATO), the country is required to comply with VAT directives. The amount for which the application is made cannot be less than EUR 400. If the application is for a period of a calendar year or the remainder of a calendar year, the amount cannot be less than EUR 50.
Spain’s currency is the Euro, and VAT rates are as follows:
Standard Rate of 21%
Reduced Rate of 10%
Reduced Rate of 4%
Note that your application for VAT returns must be submitted to the Spanish authorities within nine months of the end of the calendar year in which the tax became chargeable; i.e., by September 30th of the following year. This deadline cannot be extended, so make sure you plan ahead!
Here are some handy phrases to remember whenever making a business related purchase. When in doubt, ask:
Please give me:
- An original VAT invoice
- With my company name and address
- VAT rate and value shown
por favor dame:
- Una factura con IVA original
- Con el nombre y la dirección de mi empresa
- Tasa de IVA y valor mostrado
For the complete story on recovering VAT in Spain and other EU countries, download our eBook .
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