Tax in Spain: VAT, income tax, company tax, capital gains

IVA in Spain

EU value-added system; most businesses file quarterly (Modelo 303).

Standard rate

21%

Local name

IVA — Value Added Tax

Type

VAT

Reduced rates

10%, 4%

Registration threshold

No registration threshold

Filing

Quarterly or monthly

Authority

Agencia Estatal de Administración Tributaria

Current rate since

1 January 2000

Company tax in Spain

The headline corporate income tax rate is 25%. In effect since 1 January 2026.

Indicative only: confirm with Spain's national tax authority. OECD 2026: central statutory CIT 25%, combined (central+sub-central) 25%; small-business combined 19% Reduced rate 19%, not modelled as a small-company rate: OECD 'targeted at small business' central rate; qualifying conditions not stated in OECD data.

Spain company tax calculator →

Did you know? Spain tax facts

• Spain's VAT didn't just coincide with joining Europe — it was effectively the entry fee, switched on the literal first day of EEC membership, 1 January 1986.

  Adopting the common European VAT was a precondition of accession; IVA launched with a 12% standard rate, far below today's 21%.

  Source: Economipedia ↗

• The tax IVA replaced — the IGTE — was so badly designed it effectively pushed companies to merge: the more separate firms a product passed through, the more 'cascade' tax piled up.

  The IGTE (1964) taxed the full value at every stage, so vertical integration became a tax-avoidance strategy that distorted the economy; Economipedia notes it 'favoured vertical concentration and caused distortions.'

  Source: Economipedia ↗

• In 2012 Spain nearly tripled the VAT on cinema, theatre and concerts from 8% to 21% — drawing strong criticism from the culture industry.

  The hike landed just as the national cinematography fund was cut 14% to €33m; cinema admissions, already over 30% below their 2001 peak (98.3m in 2011), kept falling, and the cultural rate was only rolled back to 10% for live performance in 2017 and cinema in 2018.

  Source: The Hollywood Reporter ↗

• During the 2022-24 inflation crisis Spain cut VAT on staple foods — bread, milk, cheese, eggs, fruit and vegetables — all the way to 0%.

  The Sánchez government's anti-inflation package zero-rated basic foods (normally taxed at the 4% super-reduced rate) from 1 January 2023, with extensions running through 2024 before phasing back up.

  Source: Sovos ↗

• Olive oil — a Spanish national symbol — was politically sensitive enough that the government zero-rated its VAT in July 2024, then permanently moved it into the 4% 'basic necessity' bracket in 2025.

  Agriculture minister Luis Planas called olive oil 'an emblem of Spain's agri-food heritage'; extra-virgin oil went 0% (Jul-Sep 2024), 2% (Oct-Dec 2024), then a permanent 4% from January 2025.

  Source: La Moncloa (Government of Spain) ↗

• Spain's 'Beckham law' (Royal Decree 687/2005) lets qualifying workers who move to Spain be taxed as non-residents — a flat 24% on Spanish-source salary, foreign income outside the net — for the arrival year plus five.

  Wikipedia: the decree passed in June 2005 and is nicknamed after David Beckham but applies to foreign workers in general; 'The choice applies in the year of arrival in Spain and continues for the following five years'; salary income is taxed at a 'flat 24%' instead of the progressive 19%–45% scale, with no personal allowances; eligibility requires not having lived in Spain in the previous five years and relocating under an employment contract.

  Source: Wikipedia — Beckham law · checked 10 October 2026 ↗

More stories, for every country that has one, on the tax facts page.