VAT at 4, 10 and 21 percent: what each rate means in a bar and in a shop

Spain applies three VAT rates. The general rate is 21 percent. The reduced rate is 10 percent. The super-reduced rate is 4 percent. Which one applies depends on what you sell and, in hospitality, on how you sell it.

In a bar or restaurant, the service of food and drink for consumption on the premises or as takeaway is taxed at 10 percent: the coffee, the menú del día, the tostada, the water, the juice. Alcoholic drinks are the main exception and are taxed at 21 percent even when served at the table; this is why a till must separate the caña from the café. Sugary and sweetened soft drinks were moved to 21 percent in 2021, so a cola at the bar is 21 while a natural orange juice is 10. Tobacco from a machine is not your sale at all.

In a food shop, the rate follows the product. Basic foods are at 4 percent: bread, flour, milk, cheese, eggs, fruit, vegetables, legumes, cereals and, after the 2022 to 2024 energy and food measures, olive oil was moved permanently to the super-reduced rate. Most other foods and non-alcoholic drinks without added sugar are at 10 percent. Alcohol, sugary drinks, cleaning products, cosmetics, clothing and almost everything that is not food are at 21 percent. Books and newspapers are at 4 percent.

Why this matters more from 2027: a Verifactu-compliant till records the rate per line and your gestor's quarterly return is built from those lines. If every product in your till is set to 10 percent because that was easier on day one, your return is wrong every quarter, and the chain of receipts now makes it visible. The fix is a one-off review of the product list with the correct rate on each item; a supplier's price list or the gestor can help with the doubtful ones.

One more thing many owners miss: the rate on the receipt is what the customer pays, but what you deduct on the purchase side follows the supplier's invoice. A bar buying wine at 21 percent and selling it at 21 percent is fine; buying bread at 4 and selling the tostada at 10 is also fine. Mixing them up on the till is not.