What taxes do you need to pay when registering a vehicle in Spain?

When talking to clients for the first time, we find that there is always a lot of confusion regarding the taxes that you have to pay when registering a vehicle in Spain and putting it on Spanish plates. Each individual’s circumstances are different, whether it be that they have owned the vehicle for more than six months and are moving to Spain, maybe its a vehicle being bought over from the UK to be used at a holiday home or even someone looking to buy and sell to take advantage of the high market value of vehicles in Spain. Here we give the low down of the taxes that could apply.

Road Tax – I.V.T.M.(Impuesto sobre Vehículos de Tracción Mecánica)

The good news about road tax (IVTM) is that generally, it is cheaper than in the UK, especially for bigger and/or more powerful vehicles. How much you pay depends on the area in which you live and what part of the year you register your vehicle in Spain. Normally the tax is paid annually, with payment requests starting around April. Some municipalities split the payments into two over the course of the year. When registering your vehicle, the tax needs to be paid upfront for the corresponding part of the year. Most people then set up a direct debit once the vehicle has been registered in Spain. In the Alicante area, people often refer to the taxes as SUMA, not IVTM. This isn’t actually correct, SUMA is the authority in Alicante that issues and collects the tax for the municipalities.

Registration Tax – Impuesto de matriculación (IEDMT) modelo 576

IEDMT, which stands for Impuesto Especial sobre Determinados Medios de Transporte, is often wrongly referred to as import tax. To calculate the tax, you first need to set the market value of the vehicle at the time it is being registered. To do this the hacienda find the model on the BOE Spanish book of new vehicle prices and then apply a percentage reduction depending in the age of the vehicle. If the vehicle doesn’t figure on the BOE then proof like a sales contract or invoice is required. If you are luckily enough to have the original invoice for the vehicle then you can apply the percentage reduction to that. A percentage reduction cannot be applied to a sale contract for a second-hand vehicle as the price on the contract is deemed to be the second-hand value. The tax office applies a further coefficient reduction for ITP and this gives you a base price, A further reduction is calculated depending on the emissions of the vehicle which then gives you the figure for the tax. Good news is that over the past 10 years we have seen these taxes greatly reduced as people register in Spain newer vehicles lower emissions.

Registration Tax Waiver – Impuesto de matriculación (IEDMT) modelo 06 (exencion)

It is possible if you are moving to Spain permanently, becoming a Spanish resident and with the correct paperwork to waive the special registrations tax and present a Modelo 06 instead. The tax office is not always as obliging when it comes to not paying taxes so it’s important that the paperwork is correct. You must have supporting documents from both Spain and the UK of where you have been living and where you now live in Spain. Also, you must have owned the vehicle for more than 6 months. Another way of waiving the registration tax and is indisputable by the tax office is if the vehicle emissions, shown in section V.7 of vehicle documentation in the EU is 120g/km or less.

Vat and Duty – IVA y aranceles

VAT and Duty, which is import tax, is applied to all vehicles from outside the EU including vehicles from the UK (except for Northern Ireland)  

Other costs associated with registering a vehicle in Spain are the technical documentation, the ITV inspection and the DGT traffic authorities. Professionals that assist people in registering vehicles should be able to give you an accurate estimation of the taxes applicable to your Spanish vehicle registration and in some cases reduce the tax liability depending on the vehicle and your circumstances in Spain.