The value added tax (VAT) is levied on the consumption of goods and services and is an indirect tax. That is, it applies to all people regardless of their economic circumstances. Currently, the general VAT rate is 21%, while reduced rates of 10% or 4% are applied to certain goods and services.
Specifically, these percentages are applied to the delivery of goods and provision of services, intra-community acquisitions of goods and imports of goods. That is, provided that the operations take place on the Peninsula and the Balearic Islands.
In this way, operations carried out in the Canary Islands, Ceuta and Melilla are excluded from its application. This exclusion allows those who reside in theses to recover the amount of VAT on purchases made in the Peninsula or the Balearic Islands. For example, during a trip. And the same goes for residents outside the European Union.
VAT refund
The return of VAT to travelers is also known as ‘tax free’ and allows you to obtain back the amount of this tax paid for any operation with Spanish VAT. However, first of all, the person must prove his residence outside the European Union or in the Canary Islands, Ceuta and Melilla.
In addition, the Tax Agency specifies that the goods acquired “should not constitute a commercial expedition.” That is to say, it must be a one-time, unusual purchase and for personal use, which are not intended for sale. And the goods must be out of the territory within three months since delivery.
On the other hand, the VAT refund was used for goods that “effectively leave the territory of the European Union.” This excludes any type of services -such as accommodation, restaurants, car rental…- and consumable goods -such as food or drinks-. The return will not be used when goods have been purchased for the equipment or supplies of any means of transport for private use (for example, tires and fuel).
How to request the evolution?
Once the requirements are met, to obtain a VAT refund the person must justify the purchases. For this reason, it is necessary to ask the establishments for the DIVA form. Since 2019 it is a mandatory requirement, so if a store does not have it, the invoice will not be valid. To complete the data, those interested must present their valid passport.
The validation of the form will be carried out at the airport or port, so it is important to save all invoices and purchase forms until the end of the trip. In addition, the passport must be presented again, together with the invoices, the DIVA form, the boarding pass and the goods for which the refund is requested. For this last point it is important to perform the validation before invoicing.
The processing is carried out directly in the automatic machines. The Tax Agency explains that “interactive terminals are usually found near customs offices, located at exit points from Spanish territory (international airports, seaports and land borders)”.
The system must validate the DIVA form. If you do not give the go-ahead, you will have to go to the customs service to confirm the validation that allows the refund. Once validated, the evolution request can be made.
Necessary settlements in the Canary Islands, Ceuta and Melilla
For residents outside the European Union, one option is to do it in a ‘tax free’ store within the boarding area, although in this case it is subject to commission. Another option is to request it directly from the stores where the purchases were made. To do this, you must send the invoice duly stamped or only indicate the DIVA form.
In the case of residents of the Canary Islands, Ceuta and Melilla, the refund will not be complete, but is subject to the liquidation of the taxes corresponding to their territories. This is the IGIC, the tax that is paid in the Canary Islands, and the IPSI, in the case of autonomous cities.
