Pricing in Spain

A Hot Tip about Business Administration in Spain

Posted on: 24 Feb 2010

Pricing practices in Spain are similar to those of the United States, although markups tend to be slightly higher. Products and services in Spain are subject to Value Added Tax (VAT, or IVA in Spanish), which is presently 16 percent. A reduced rate of 7 percent is applied to the sale and import of human or animal foodstuffs (except alcoholic beverages), water, agricultural chemicals, pharmaceuticals for animal use, medical and health products, mopeds, personal dwellings, hotel and restaurant services, transportation services, agricultural services, street cleaning services, entertainment services, building and construction services, medical services and funeral services. A reduced rate of 4 percent is applied to bread, dairy products, eggs, fruit and vegetables, books and newspapers, pharmaceuticals for human use, vehicles and medical items for handicapped people.


VAT is not imposed in the Canary Islands, Ceuta and Melilla. A General Indirect Tax of 5 percent is imposed in the Canary Islands.


Payment terms have been reduced drastically in the recent years, and are usually based on 15-, 30-, 60, and under certain circumstances, 90-day terms. Although there is an EU directive covering payments, common practice in Spain is that large corporations and large retailers negotiate or impose longer payment terms of up to four to six months. The government defers all payments, and depending on the department, payments can be deferred up to one year.


Spain became a full member of the European Economic Community in 1986, and has been participating in the euro zone since 2002.


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Posted: 24 February 2010

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