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How Spanish VAT works for a small business
The module’s worked examples, then cases to attempt before revealing their solution · 3 sections · 329 words · 4 min
Worked example
Two rates in the same café
A café serves a sandwich and a coffee at the counter for a taxable amount of 5 €. Supplying food and drink for immediate consumption is a restaurant service, which article 91, section one.2.2.º, taxes at 10 %: 0.50 € of VAT. The same customer buys a bottle of wine to take away for a taxable amount of 10 €. That sale is a supply of goods, and alcoholic drinks are excluded from the 10 % list, so the general rate applies: 2.10 € of VAT. One till, two rates.
Worked example
A deposit and a balance
In February a carpenter receives an advance of 1,000 € plus VAT for a kitchen he will install in April. The VAT on that advance falls due in February, the month of collection. When he installs the kitchen in April and invoices the remaining 4,000 € of taxable amount, the VAT on that balance falls due in April. Two periods, one job.
Practical case
Lucía's first quarter
Between January and March, Lucía invoices three web projects for a total taxable amount of 9,000 €, all at the general rate. She buys a computer for the studio for 1,500 € plus VAT at the general rate, with an invoice in the studio's name, and pays a private streaming subscription of 12 € including VAT. How much output VAT has she collected, how much input VAT can she deduct, and what is the difference?
Hint: Only purchases for the activity, documented by an invoice, enter the deduction. Apply the general rate to both taxable amounts.
Show the solution
Output VAT: 9,000 € × 21 % = 1,890 €. Deductible input VAT: 1,500 € × 21 % = 315 €. The streaming subscription is a private purchase and stays out of the return. Difference: 1,890 € − 315 € = 1,575 €, which is the amount she will have to pay with the return for the quarter.
Answer: 1,890 € collected, 315 € deductible, 1,575 € to pay
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