The Welex team of lawyers and accountants is pleased to write a few lines on the tax regime for travel agencies in Spain.
The travel agencies in Spain are subject to a special tax regime with regards to way the of determining the taxable base for calculating the VAT due.
This regime applies to Spanish travel agencies, tour operators and, in general, any entrepreneur or professional in Spain when they meet the following requirements:
- They act in their own name in respect of travellers.
- They use services or goods supplied and rendered by other entrepreneurs or professionals in carrying out the trip.
This special Spanish tax scheme does not apply when own means of transport or hotel and catering services are used. But if on the journeys are made using partly own and partly other people´s means, this special scheme only applies to services provided by other people´s means.
Accommodation or transport services provided jointly or separately and, where appropriate, also provided with other complementary services, shall be considered to be journeys.
Taxes to be taken into account at the time of running a travel agency in Spain.
- VAT in Spain charged on supplies of services:
There is no obligation to include the VAT in Spain separately on the invoice, it is understood to be included in the price and, therefore, will not be deductible by the customer. But as from 1st of January 2015, if the business customer so requests, it is possible to opt for the general VAT system.
The taxable amount will be the gross margin of the travel agency.
- Spanish VAT deductible on purchase of services:
It shall not be deductible when it corresponds to purchases of goods and services made for the purpose of the journey which are of direct benefit to the traveller.
The rest of the VAT in Spain is deductible.
- Exempt transactions:
- Transactions are exempt from VAT where the supplies or services are made outside the European Union.
- When the journey takes place in different countries, inside and outside de Union, only that part of the journey which takes place in the third countries is exempt in proportion to the costs incurred in each of them.
- Invoicing obligation in Spain:
Entrepreneurs and professionals covered by this special regime are not obliged to state the amount charged separately on the invoice, and it shall be understood to be included in the price.
At the Spanish invoice must include the mention: “special regime for travel agencies” – “régimen especial de las agencia de viajes”
- When can the general scheme be applied instead of this special scheme in Spain?
From the 1st of January 2015, each transaction may opt for the general tax regime when the recipient of the service is a business or professional entitle to a VAT deduction or refund.
The option must be communicated in writing to the recipient before or at the same time as the services are provided, although it will be presumed to have been made when the invoice issued does not contain the words “special scheme from travel agencies” – “régimen especial de las agencia de viajes”.
- How is the Spanish Taxable Base determined?
The taxable base is the gross margin of the travel agency.
From the 1st of January 2015 the taxable base will be determined on a transaction –by-transaction basis.
Taxable Margin Base = Price of the trip (excluding VAT) – Acquisitions of goods and services for the benefit of the customer (inclusive of tax).
- VAT and Income tax example of a travel agent in Spain
In May 2022 you sell a package for a journey with a costplus VAT included to the company of:
- Hotel accommodation: 500,00 € + 10% VAT = 550,00 €
- Catering: 60,00 € + 10% VAT = 66,00 €
- A Show: 100,00 € + 21% VAT = 121,00 €
TOTAL COST TO THE COMPANY: 737,00 €
The travel agency wishes to receive a 25% margin over the cost of the Journey:
25% Margin: 737,00 € x 25% = 184,25 €
VAT over Margin: 184,25 € x 21% = 38,69 €
Invoice to be issued to customer: (737,00 € + 184,25 € + 38,69 €) = 959,94 €
“régimen especial de las agencia de viajes”
Spanish VAT to be paid to the Inland Revenue for this journey = 38,69 €
If you need advice on the tax regime for travel agencies in Spain, or if you need any tax or legal advice, do not hesitate to contact the Welex team of lawyers and accountants in Spain.