Spain — VAT (IVA) for Businesses

Why This Matters

A company must register for IVA before it starts trading, apply the correct rate to each sale, and file on a strict quarterly (or monthly) cycle plus an annual summary. Missing the registration step, misapplying a reduced rate, or missing the real-time reporting deadlines that apply to larger companies all carry compliance risk.

Key Facts

• IVA rates: 21% (general/standard), 10% and 4% (reduced rates), and a 0% rate for specific exempt/zero-rated operations — confirmed on AEAT's Modelo 303 instructions page.
• A separate equivalence-surcharge scale (5.2%, 1.4%, 0.5%, 1.75%) applies only to retailers under the special "recargo de equivalencia" regime, not to general trading companies.
• Registration: businesses must declare the start of an economic activity — including VAT registration — via Modelo 036 (Declaración Censal) with AEAT, and this "alta" must be filed before the activity begins.
• Filing frequency: quarterly Modelo 303 self-assessment is the default (due 1st-20th of the month following each of Q1-Q3, with Q4 extended to 30 January); monthly filing applies to large companies over the SII threshold, businesses in the monthly VAT-refund scheme (REDEME), and VAT groups (due 1st-30th of the following month, with January due by the end of February).
• Modelo 390 is the annual IVA summary, breaking down the year's taxable bases and accrued quotas by rate (21%/10%/4%); it is filed 1-30 January of the following year and does not itself trigger an additional payment, since VAT is already settled in the quarterly/monthly filings.
• SII (Suministro Inmediato de Información): mandatory near-real-time electronic submission of VAT ledgers for companies whose prior-year volume of operations (per Art. 121 Ley IVA) exceeded €6,010,121.04, plus REDEME businesses and VAT groups. Records must be submitted within 4 calendar days of invoice issue/accounting entry, and in any case before the 16th of the following month.
• Unconfirmed: AEAT's general IVA page references upcoming mandatory e-invoicing between businesses/professionals under Real Decreto 238/2026 and the VERI*FACTU certified-billing-software system, but I could not fetch the full implementation timeline or applicability thresholds for either during this session — treat specific compliance dates for e-invoicing/VERI*FACTU as unverified until confirmed directly against the Real Decreto text.

Steps

1. 1. Register for IVA — File Modelo 036 with AEAT before starting to trade.
2. 2. Issue compliant invoices — Show the applicable IVA rate(s) on every invoice; e-invoicing/VERI*FACTU software requirements are being phased in but exact dates/thresholds are unconfirmed (see note above).
3. 3. Keep VAT ledgers — Maintain books of issued and received invoices — in near-real time via SII if the company is over the large-company threshold or otherwise obligated.
4. 4. File Modelo 303 — Quarterly (or monthly, if obligated), reporting output VAT collected and input VAT deducted.
5. 5. File Modelo 390 — Annually, 1-30 January, summarizing the year's VAT activity by rate band.

Timelines

• Quarterly Modelo 303: due 1st-20th of the month after quarter-end (Q4 due by 30 January).
• Monthly Modelo 303 (large companies, REDEME, VAT groups): due by month-end (January due by end of February).
• Modelo 390 annual summary: due 1-30 January.
• SII ledger submissions: within 4 calendar days of the invoice/accounting entry, and always before the 16th of the following month.

Required Documents

• Modelo 036 (VAT registration)
• Modelo 303 (quarterly or monthly self-assessment)
• Modelo 390 (annual summary)
• IVA-compliant invoices and VAT ledgers (books of issued/received invoices)

Common Mistakes

• Forgetting to file the annual Modelo 390 even though it triggers no extra payment.
• Missing SII's 4-day/16th-of-month deadlines once a company crosses the large-company turnover threshold.
• Applying the wrong reduced rate (10% vs. 4%) to goods or services.
• Invoicing before completing Modelo 036 VAT registration.