General, reduced and super-reduced VAT
Value Added Tax (VAT) is, together with Personal Income Tax (IRPF), one of the most important taxes in the Spanish tax system. Keep in mind that VAT is an indirect tax, so its cost is borne by the consumer who purchases the product or service. It is linked to the consumption of products and services and, since the 2012 tax reform, it is divided into three rates:
General VAT: this is VAT at 21% and applies to all sales or purchases that are not subject to a different VAT rate.
Reduced VAT: this is VAT at 10% and applies to a number of specific activities, such as the sale of substances or products for human or animal nutrition, travel transport, to name but a few.
Super-reduced VAT: this is VAT at 4% and applies to certain operations such as the sale of basic foodstuffs, among others.
Exempt VAT
This 0% VAT is charged on those activities that do not prevent the right to deduct the tax -exports, assimilated operations, customs regimes, intra-Community deliveries...- and on those that affect the amount of VAT that could be deducted.
Exports: the international seller or exporter will not have to charge VAT on the transaction and, as it is a full exemption, will be able to deduct the VAT borne on purchases made for the performance of the good or provision of the service.
Intra-Community VAT on goods and services: this applies to transactions such as the sale and purchase of goods and services between member countries of the European Union (EU). It can be used if, for example, a company based in Spain sells a product to an individual, company or professional in another EU country.
VAT on investment goods
This VAT of 21%, 10% or 4% applies to the purchase of capital goods (furniture, livestock, real estate, etc.) which, by their nature and function, are used as working tools or means of operation for a period of more than one year.
VAT on used goods
This VAT of 21%, 10% or 4% is levied on the supply of goods by resellers in their own name. The taxable amount of the tax is determined on a case-by-case basis.
Withholding tax
This VAT rate of 19%, 15% or 7% applies if you are self-employed or are obliged to make withholdings. Remember to specify the percentage to be withheld on your invoice.
Employees
Employee taxes are applied when you create a payroll and are used to account for the total amount of value added on the payroll. The most common are: employee wages, employee deductions, employee per diems, employee 19% and employee 33% deductions.
Other taxes
In Holded, you can also add taxes such as: investment, taxable person, exemption (art.20), withholdings, agricultural activities, forestry, image rights, among others.