In Spain, there is a sales tax that is called “IVA” or VAT (in Spanish “Impuesto sobre el Valor Añadido), a tax applied on retail sales or services provided by professionals. Basically, the vast majority of purchases (big and small) you make on a day-to-day basis are taxed with this sales or VAT tax.

In Spain, IVA stands for Impuesto sobre el Valor Añadido, which is the Spanish equivalent of Value Added Tax (VAT). It is an indirect tax applied to the consumption of almost all goods and services. In 2026, the standard IVA rate in Spain is 21%, which is included in the price you see on menus, price tags, and receipts—unlike in the U.S., where tax is added at the register. There are also "reduced" rates: 10% for things like restaurant services, passenger transport, and basic food items; and a "super-reduced" rate of 4% for essentials like bread, milk, books, and medicine. For international travelers visiting from outside the European Union, the IVA is a significant factor because you may be eligible for an IVA refund on high-value purchases (like clothing or jewelry) when you leave the country, provided you have the proper "Tax-Free" paperwork from the retailer. This makes shopping in Spain particularly attractive for tourists, as you can effectively receive a 10% to 15% discount on your luxury purchases by reclaiming the tax at the airport.