VAT (IVA in Spain) shows up on almost every purchase, yet many self-employed people and small businesses still work it out by hand and end up using the wrong rate or mixing up the net price with the final price. This guide sets out the rates that apply in 2026, explains how to move from the taxable base to the price the customer pays in both directions, and shows how VAT relates to your trading margin.
The three VAT rates in 2026
Spain applies three VAT rates, and in 2026 they are back to the permanent figures now that the temporary cuts from the inflation years have ended. According to the Agencia Tributaria:
- 21%, standard rate. The default whenever the law does not set a lower rate: electronics, clothing, appliances, professional services, cosmetics and most goods and services.
- 10%, reduced rate. Hospitality, passenger transport, new-build housing, water, glasses and contact lenses, and foods such as pasta and seed oils.
- 4%, super-reduced rate. Basic essentials such as plain bread, milk, eggs, fruit and vegetables, books, medicines for human use, and, permanently since 2025, olive oil.
The correct rate depends on the product, not on who sells it. A single shop can invoice at 21% and at 4% on the same receipt. The temporary cuts that took some basic foods to 0% and electricity to 5% have ended, so in 2026 those products go back to their usual rate. The most recent lasting change is olive oil, which moved from 10% to 4% under Law 7/2024 and stayed there.
Quick reference: which rate applies
| Category | 2026 rate |
|---|---|
| Most goods and services, electronics, clothing, appliances | 21% |
| Hospitality, passenger transport, new-build housing, water | 10% |
| Glasses, contact lenses, pasta and seed oils | 10% |
| Plain bread, milk, eggs, fruit and vegetables, books, medicines | 4% |
| Olive oil (permanent since 2025) | 4% |
Temporary 2026 energy and fuel windows
The permanent table above covers most invoices, but the 2026 Agencia Tributaria rate sheet adds a temporary energy rule that has to be kept separate. Real Decreto-ley 7/2026 brought an extraordinary 10% rate for selected supplies for part of 2026, not for the full year.
For natural gas, briquettes, biomass pellets and firewood, the 10% rate applies from 22 March to 31 May 2026. Outside that window, the standard 21% rate applies. For certain fuels and motor fuels within the excise-duty reference, the temporary 10% window runs from 22 March to 30 June 2026 before returning to 21%.
That means a 2026 utility or fuel invoice can contain more than one rate if the billing period crosses one of those dates. Do not copy the rate from the previous bill without checking the exact supply period. For an ordinary invoice issued after the temporary window, the working assumption is back to 21% unless the transaction has its own reduced rate.
From the net price to the price with VAT
The taxable base is the amount before VAT, the figure you calculate your margin on. The price with VAT is what the customer pays. To add the tax, multiply the base by one plus the rate:
- A base of 100 euros at the standard rate: 100 times 1.21, which is 121 euros, of which 21 is VAT.
- A base of 100 euros at the reduced rate: 100 times 1.10, which is 110 euros, of which 10 is VAT.
The reverse is just as common: you know a final price with VAT and want the tax share. Here you have to divide, not subtract the percentage. A price of 121 euros at the standard rate works out as 121 divided by 1.21, that is 100 euros of base and 21 of VAT. Taking 21% straight off the 121 euros would give 95.59 euros, a wrong result that crops up in rushed quotes. The National Calculators VAT calculator handles both directions automatically at whatever rate you choose.
Output VAT and input VAT
For a business, VAT is in principle neither a cost nor a gain: it passes through. You charge VAT on your sales and deduct the VAT you paid on your business purchases. Each quarter you file the modelo 303 and settle the difference between output VAT and input VAT. If your taxed purchases exceed your sales in the period, you are left with a balance to carry forward or reclaim.
Unlike some countries, Spain has no general turnover threshold below which you skip charging VAT: most activities charge it from the first invoice, except exempt operations such as healthcare, regulated education or certain insurance. It is worth confirming the specific case of your activity with the Agencia Tributaria.
The recargo de equivalencia
Many retailers selling to the final consumer fall under the special regime called recargo de equivalencia. Under it, the supplier adds a surcharge on top of the VAT and the retailer no longer files returns on those sales. The surcharges in 2026 are 5.2% on goods at 21%, 1.4% on those at 10%, 0.5% on those at 4%, and 1.75% on tobacco. If you are self-employed under this regime, that surcharge is an extra cost of your stock, not something you reclaim. For instance, a retailer on this regime buying 21% stock for a 100 euro base receives an invoice with 21 euros of VAT and 5.20 euros of surcharge, 126.20 euros in total, and that 5.20 euros stays as added cost of the goods.
VAT and margin: not the same thing
VAT is calculated on the selling price, whereas your margin is calculated on your costs. A shop that buys an item for 50 euros net and resells it at 70 euros net makes a profit of 20 euros, that is a margin of 28.6 percent on the selling price, or a markup of 40 percent on the cost. The 21% VAT is then added to the net selling price to give the final price, without touching the margin. Keeping the two calculations apart stops you thinking that a 21% discount cancels the VAT, which it does not.
For purchases from suppliers outside the euro area, also think about the exchange rate. A supplier invoicing in dollars or pounds is easier to compare after conversion: the currency converter gives the amount in euros from the European Central Bank reference rates, on which you then apply import VAT.
Frequently asked questions
What is the standard VAT rate in Spain in 2026?
The standard rate is still 21%. It applies by default to all goods and services that do not have a reduced or super-reduced rate set in law.
How do I strip VAT out of a final price?
Divide the amount with VAT by one plus the rate. At 21%, divide by 1.21; at 10%, by 1.10; at 4%, by 1.04. The VAT share is the difference between the final price and the base you get.
Can a product have more than one VAT rate?
No, each product is taxed at a single rate, but one purchase can mix items at 21%, 10% and 4%. The invoice breaks the VAT down by rate.
Is olive oil still at 4% in 2026?
Yes. After the temporary cuts, olive oil settled permanently at the super-reduced 4% rate under Law 7/2024, and it stays there in 2026.
Were there temporary energy VAT rates in 2026?
Yes. The Agencia Tributaria lists a temporary 10% rate from 22 March 2026. For natural gas, pellets, briquettes and firewood it runs to 31 May 2026; for certain fuels and motor fuels it runs to 30 June 2026. The standard rate applies outside those windows unless another specific reduced rate covers the transaction.
The rates and rules cited come from the Agencia Tributaria, its 2026 VAT rates sheet and the BOE. Reviewed on 10 September 2026. This article is for general information and is not tax advice.