VAT (Value Added Tax)
Indirect tax on the consumption of goods and services at each stage of the value chain. Rates: standard 21%, reduced 10%, super-reduced 4%. Businesses act as collectors: they charge VAT to customers and deduct input tax on purchases. The difference is settled quarterly (form 303) or monthly (REDEME). Some services are exempt: healthcare, education, financial services.
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Other Tax law terms
Mandatory electronic invoicing system from AEAT requiring invoicing software to guarantee integrity, preservation, traceability and unalterability of billing records.
AEAT procedure to verify compliance with tax obligations. The taxpayer has the right to legal counsel, copies of proceedings and a maximum 18-month timeframe.
Quantity resulting from measuring the taxable event, to which the tax rate is applied to determine the tax liability. Example: in personal income tax, it is the sum of net income minus reductions.
Legal assumption whose occurrence gives rise to the tax obligation. Example: in VAT, delivery of goods or provision of services; in property transfer tax, transfer of real estate.
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