13.12.2024 
Car Taxes in Spain: What Problems May Arise and How to Solve Them
Buying and owning a car in Spain is inevitably associated with paying a number of taxes and fees. Many owners fear complications during the registration, do not know the exact payment deadlines or worry about missing important benefits. Below we analyze which taxes exist and how to pay them properly to avoid fines and overpayments.
One-Time Car Registration Tax (Impuesto de Matriculación)
The Nature of the Payment
This tax is paid upon the first registration of the vehicle. It usually refers to a new car from a showroom or a car imported from abroad and receiving Spanish plates. The rate of the Impuesto de Matriculación is calculated based on the level of CO₂ emissions, and the final amount depends on the car's value at the time of registration.
Problems and Solutions
- Problem: High tax rate for significant CO₂ emissions and an expensive car.
- Solution: Consider purchasing a model with lower emissions; check eligibility for benefits if you belong to the category of favored owners (for example, persons with disabilities).
In 2024 the following base rates are applied for the calculation:
- Up to 120 g/km CO₂: 0%
- From 121 to 159 g/km CO₂: 4.75%
- From 160 to 199 g/km CO₂: 9.75%
- From 200 g/km CO₂ and above: 14.75%
Annual Vehicle Tax (IVTM (Impuesto sobre Vehículos de Tracción Mecánica))
How It Is Calculated
Every owner pays an annual tax for the right to use the car. The amount depends on the municipality, engine power (CVF) and type of fuel. On average, the tax in Spain ranges from 20 to 140 euros per year. In some regions there are additional surcharges, for example, in Catalonia a local emissions tax is introduced (up to 40 euros per year).
Problems and Solutions
- Problem: Confusion due to different tax rates in each municipality.
- Solution: Before buying a car, check the local rate and available benefits. Set up an automatic debit from your account to avoid missing the payment deadline.
Owners of historic cars, cars for persons with disabilities, public transport vehicles and several other categories are exempt from paying the annual tax.
Insurance Premium Tax (IPS (Impuesto sobre las Primas de Seguro))
This payment is usually included in the insurance policy and goes unnoticed by the driver. The IPS rate in Spain is 8% of the cost of the insurance. With an annual insurance cost of 470 euros, the tax amounts to approximately 37.6 euros. An increase in this rate may come as an unpleasant surprise, so be sure to check what is included in the final insurance cost.
VAT (IVA (Impuesto sobre el Valor Añadido)) and Property Transfer Tax (ITP (Impuesto de Transmisiones Patrimoniales))
VAT When Buying a New or Used Car
When buying a new car the VAT rate is 21%. For persons with disabilities a reduced rate of 4% applies. A similar 21% VAT is paid if you buy a car from a legal entity. In addition, VAT is included when undergoing a technical inspection and when buying fuel.
ITP in Transactions Between Private Individuals
If a car is sold by a private individual to another private individual, instead of VAT the property transfer tax ITP is paid. Its amount is set regionally, usually from 4% to 8% of the car's fiscal value. The fiscal value may differ from the market value and is calculated according to tables published annually in Spain.
Technical Inspection (ITV (Inspección Técnica de Vehículos)) and Fee
To undergo the ITV in Spain, a fee is charged, usually ranging from 30 to 60 euros. The maximum rate applies to diesel cars, and the minimum to electric vehicles. The fine for driving without a valid ITV can reach 500 euros.
- A car less than 4 years old does not require a mandatory technical inspection.
- From 4 to 10 years old, the technical inspection is conducted every two years.
- Older than 10 years: annually.
Key Tips to Save Money and Avoid Fines
Analysis and Planning
The main difficulty is accounting for all tax obligations in a timely manner. It is recommended to analyze the emission level, engine power, and regional rates in advance. This will help avoid unexpectedly high expenses.
Checking for Exemptions and Benefits
Persons with disabilities, large families and other categories may be eligible for tax benefits. Check the rules in your municipality to legally reduce expenses.
Automating Payments and Meeting Deadlines
If you have a current account with a Spanish bank, it is advisable to set up an automatic debit (domiciliación) for the annual IVTM tax to avoid missing the payment deadline and incurring fines. It is also important not to forget the deadlines for ITP and other taxes in the car buying and selling process.
Conclusion
Car taxes in Spain include several types of mandatory payments: from the one-time registration tax to the annual IVTM vehicle tax, as well as insurance, VAT or ITP payments when purchasing a car. The main concerns for owners are the lack of knowledge of local details, the fear of missing deadlines, and the risk of fines. The solution lies in studying the rules in advance, automating payments and properly accounting for all exemptions. Approach the matter systematically and your car ownership in Spain will be much simpler and more peaceful.
