What is VAT and who should declare it? A guide to help understand this type of tax in Spain

Subject:  Law and Political Science
A man and a woman doing calculations with a tablet
Author: Sandra Pérez

The new library guide clarifies basic concepts about VAT in Spain: transferred, input, super-reduced... We can make it easy for you!

If you are starting out as a freelancer, you'll find information about VAT self-assessment and deductions.

The recommended contents include a comprehensive practical manual focusing on tax law.

Value-added tax (VAT) is an indirect tax that is very much present in our daily lives, as it falls on consumers when they pay for goods and services. The UOC's library team has prepared a guide with a selection of content to help you answer the most frequently asked questions about this tax: what it is, what types are there, how it is calculated and who is in charge of collecting it and presenting it to the Tax Agency.

The idea to create this library guide came from Ana María Delgado, Professor of Financial and Tax Law, who wanted to provide students with a range of information on value-added tax. In particular, she highlighted the section on the implementation of a new VAT management system which makes information immediately available. "This system affects a lot of people who have to pay VAT, and it's a highly intensive use of information technologies in the field of taxation," she explained. 

The first section of the library guide is introductory and presents you with web pages from reliable sources that explain the basic features of VAT in a very plain way. It will help you, for example, to understand why it is described as an indirect, general, real, instantaneous and multiphase tax.

In Spain, general VAT is usually 21% but there are products and services exempt from this tax or where a reduced rate of 10% or a super-reduced rate of 4% applies. Using the resources in this first section of the guide, you can learn more about tax rates and what goods and services they are levied on. 

Likewise, as the laws that regulate VAT frequently change, you will find the current regulations in the library guide as well as legal affairs websites to keep up to date with all the news.

How is VAT managed?

Companies or self-employed workers act as tax collectors and must periodically calculate the difference between the VAT they have charged to customers and what they have paid in their purchases from suppliers – transferred VAT and input VAT – and declare it or settle it with the Tax Agency through specific forms, such as form 303. We have included very comprehensive resources in the guide detailing who is to pay VAT, when and how.

There is also a section on deductions to find out which expenses related to your professional activity can be deducted and what the requirements are for doing so. On the other side of the coin, there is a specific section in the library guide on tax fraud, including the penalties for taxpayers who evade paying the tax or unduly obtain deductions or benefits.

A 360º view of VAT

Included in the content selected by the library is Memento IVA, a practical manual from the legal publisher Lefebvre, which you can consult by entering your Virtual Campus password. It is an easy-to-use reference book about tax with examples and comments from experts.