According to the Spanish Tax Agency (AEAT), value-added tax (VAT) collection in Spain increased by 1.6% in 2023, reaching €83.9 billion. Together with other indirect taxes, VAT represents 14.5% of the total revenue collected by the state, significantly surpassing contributions from Spain’s autonomous communities and other sources. The annual amount collected varies depending on factors such as the volume of goods and services sold that are subject to one of Spain’s VAT rates.

As with other taxes, the same VAT percentage is not applied in all cases. The applicable rate depends on the category of products and services. For example, the general VAT rate for most goods and services in Spain is 21%. However, if they are classified as “essential” or “basic” products or services, the super-reduced VAT rate (4%) applies. Below, we explain how the super-reduced VAT rate works.

What’s in this article?

• What is super-reduced VAT?
  
• How to calculate super-reduced VAT
  
• Which products and services are taxed at the super-reduced VAT rate?
  
• Comparison of super-reduced VAT in Spain and the EU
  
• Temporary reduction of super-reduced VAT
  

What is super-reduced VAT?

The super-reduced VAT rate applies to a specific group of products and services sold in Spain, particularly on the mainland and the Balearic Islands. Unlike the general VAT rate of 21%, the super-reduced VAT rate in Spain is set at only 4%. This rate was introduced in 1993 with an initial rate of 3% and was increased to 4% in 1995, where it remains today. This rate is intended to make certain essential goods and services more affordable, such as medicines and wheelchairs (a full list is provided below).

It’s worth mentioning that in addition to the general VAT and the super-reduced VAT, Spain also applies a reduced VAT rate of 10% on some products and services.

How to calculate super-reduced VAT

To calculate the super-reduced price, simply add a percentage to the base price:

Example:
5 Medicines (Units) at €5 Each (Unit Price): 5 × €5 = €25
Super-Reduced VAT: €25 x 4% = €1
Final Price: €25 + €1 = €26

More simply, this calculation multiplies the taxable base by 1.04 (representing 100% of the base plus the 4% super-reduced VAT). The result is identical:

€25 × 1.04 = €26

In this example, if the medicines were taxed at the standard VAT rate (21%), the total price would be €30.25. Therefore, the super-reduced VAT represents a saving of €4.25.

Which products and services are taxed at the super-reduced VAT rate?

The super-reduced VAT rate can only be applied to these goods and services:

• Medicine: This only includes medications used by humans.
  
• Physical media: For magazines, books, and newspapers to qualify for the 4% VAT rate, at least 10% of the income must come from the sale of the publication. Revenue from other related sources, such as advertising, cannot exceed 90% of total revenue. Publications that consist entirely of advertising content do not qualify for this VAT rate.
  
• Mobility support vehicles: These include vehicles for persons with reduced mobility (PRM) or with a disability.
  
• Medical devices: Specifically implants, prostheses, and wheelchairs fall under this category.
  
• Personal care items: This includes condoms and absorbent hygiene products (e.g., panty liners, sanitary napkins, etc.).
  
• Government subsidized housing (VPO): The super-reduced VAT rate applies both to the purchase of a subsidized property and to rentals where the contractual document includes an option to purchase the property at a later date.
  
• Dependent care services: This includes services requested by dependent persons (also known as “tele-assistance”).
  

When you sell a good or service, you can only apply the super-reduced VAT rate if it falls within the specified list. Otherwise, you would be committing an irregularity that could result in VAT penalties.

To ensure that you always apply the correct rate, it can be extremely beneficial to use an automation tool like Stripe Tax, which automatically calculates and collects VAT on your sales. In addition, Tax allows you to generate reports on the tax collected to streamline your tax filings and stays up to date on rate changes in the more than 50 countries where it is available (view exceptions here).

Comparison of super-reduced VAT in Spain and the EU

The differences between EU countries include the products each country chooses to tax at the super-reduced rate, as well as the rate percentage. For example, Spain is at a moderate level, while other countries have higher or lower rates. In the list below, we have included the super-reduced VAT in Spain along with four other EU member countries for comparison:

• Spain: 4%
  
• Italy: 4%
  
• France: 2.1%
  
• Portugal: 6%
  
• Poland: 5%
  

Note that in some EU countries, such as Germany, there is no super-reduced VAT rate. In other words, certain territories only have two VAT rates: the general and the reduced rate.

Temporary reduction of super-reduced VAT

To mitigate the effects of the economic crisis in Spain, the government has implemented several temporary reductions in the super-reduced VAT rate. On January 1, 2023, the government introduced anti-inflation measures, including the elimination of the super-reduced VAT rate on basic foodstuffs, including:

• Bread
  
• Bread flour
  
• Eggs
  
• Cheese
  
• Milk from animals
  
• Natural cereals
  
• Fruits and vegetables
  
• Tubers and legumes
  

Following the implementation of these measures, the VAT rate on these foods was reduced from 4% to 0%, meaning customers only have to pay the taxable base.

On June 25, 2024, the Council of Ministers met and approved the extension and expansion of the existing measures, as outlined in Royal Decree-Law 4/2024. This new amendment added olive oil to the list of products temporarily exempt from VAT.

The European Commission—to ensure compliance with the Stability Pact in all EU member states—issued a directive calling for the gradual withdrawal of measures introduced to counter the effects of the economic crisis. Starting in 2025, the super-reduced VAT rate is expected to return to the standard 4% rate for all products and services listed above.

VAT percentages can vary depending on political, social, and economic circumstances. Therefore, we recommend checking the current VAT rates from a source such as the AEAT, which also outlines specific exceptions subject to a 0% or 5% VAT rate.