The recargo de equivalencia is a special IVA regime, mandatory for freelancers who sell retail without transforming the product. You pay slightly higher IVA to your suppliers and, in exchange, you don't file the modelo 303 or settle IVA yourself.
The recargo de equivalencia is a special IVA regime designed for retail: freelancers who sell products to end consumers without transforming them (a clothes shop, a stationery store). If you fit that profile, it's usually mandatory.
Your suppliers charge you an extra surcharge on top of the normal IVA: 5.2% on products at 21%, 1.4% on those at 10% and 0.5% on those at 4%. In exchange for paying a bit more when you buy, you skip settling IVA: you don't file the [modelo 303](/en/glossary/modelo-303) or declare the IVA on your sales.
The idea is simplification: the tax office collects IVA up front through the supplier, and the retailer avoids the quarterly IVA paperwork. The cost is that the extra IVA paid isn't recovered.
The recargo de equivalencia changes the maths: you pay a bit more buying stock but you drop the modelo 303. If you sell retail, it's worth being clear about it with your gestoría before setting your prices.
Freelancers engaged in retail of products without transforming them (direct sale to the end consumer). In those cases the regime is usually mandatory. It doesn't apply to professional service activities.
No. One consequence of the recargo de equivalencia is that you don't file the modelo 303 for that activity: the IVA is paid by your supplier through the surcharge. In exchange, that extra IVA paid isn't deductible.
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.
