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IVA (Impuesto sobre el Valor Añadido) is Spain’s equivalent of VAT, with a general rate of 21%, and reduced rates of 10% (e.g., hotel services and some food products) and 4% (basic essential goods, certain books, and medicines). Autónomos and companies providing taxable services or goods must issue invoices with IVA, file the quarterly Modelo 303 return, and the annual summary Modelo 390. Certain professional services — healthcare, education, and some financial and insurance transactions — are exempt from IVA. Freelancers providing services to clients outside Spain (especially to EU business clients under the reverse-charge mechanism, or outside the EU) follow separate invoicing rules with no IVA charged, which requires correctly determining the place of supply and the recipient’s status.
