What types of VAT are there and to which products and services do they apply?
TRENDS I August 21, 2020
VAT, or Value Added Tax is one of the best known and common taxes we come across on a day-to-day basis. It is an indirect tax, since it subjects indirect manifestations of the taxpayer's economic capacity to taxation, taxing the consumption we make of any good or service.
The current general VAT tax rate is 21%, which means that for each product that we buy or hire, we will have to pay 21% VAT on its amount (the tax base).
However, in addition to the general rate, which is the one applied to most goods and services, there are another two types of VAT:
Reduced rate: 10%. This percentage is the one that corresponds to deliveries, intra-community acquisitions or imports of, among others, the following goods:
The reduced rate of 10% must also be paid on the following services:
Super reduced rate: 4%, which is the rate applied to primary need products. This section includes the following products:
We also pay a 4% super reduced VAT when we pay for any of the following services:
Although we have to pay these three types of VAT on most of the goods we buy, some activities that are exempt from the payment of this tax. The Tax Agency's list includes:
The Tax Agency's website also shows the activities that are not subject to VAT.
It should be noted that VAT is a tax that is applied in all phases of a good or service's manufacturing and sales chain, although this is only borne by the end consumer, given that companies and self-employed persons can deduct the VAT applied in each phase.
Santander Impulsa Empresa, the bank's VAT calculator, makes it easier to calculate VAT. You just have to enter the figures you know and the rest is calculated immediately.
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