IVA (value-added tax) is the tax you charge your client on each invoice and then pay to the Spanish tax office. It passes through your account but is never yours. The standard rate is 21% and it's filed quarterly with the modelo 303.
IVA is the tax you add to your invoices, charge your client, and then pay to the tax office. The key idea: IVA passes through your account, but it isn't your money. You're an intermediary who collects it.
That's why the most common mistake isn't a calculation error — it's a mental one: seeing the IVA you charged as income. When the quarter comes and you have to hand it over, it stings. Set it aside the day you get paid and it stops stinging.
The standard rate is 21% and applies to most professional services. There's a reduced 10% rate (for example hospitality or transport) and a super-reduced 4% rate (basic essentials like bread or books). Most service freelancers work almost always at 21%.
Not everything carries IVA: some activities are exempt (such as certain training or healthcare services) and services to clients outside Spain usually don't carry Spanish IVA, though they still have to be declared.
Each quarter you file the modelo 303. There you don't hand over all the IVA you charged: you subtract the IVA you paid on your gastos deducibles. The difference is what you pay (or what the tax office refunds, if you paid more than you charged).
If you take away one idea about IVA, make it this: the 21% you charge isn't yours. Set it aside the same day it lands and the quarter becomes a formality, not a fright.
No. You charge IVA to your client on behalf of the tax office and pay it over each quarter with the modelo 303. The only thing you can deduct is the IVA you paid on your business expenses. That's why it's best to set it aside as soon as you're paid.
Some activities are IVA-exempt (for example certain regulated training or healthcare services) and services to clients outside Spain usually don't carry Spanish IVA. In those cases you don't charge IVA, but you still have to declare the operation correctly.
Cece takes care of what weighs on your day-to-day (projects, payments, proposals, tax calculations) and surfaces the numbers that matter, so they stop weighing on you and you can get back to what counts.
