VAT IN SPAIN, DEDUCTIONS AND EXEMPTIONS
The amount of VAT paid on the acquisition of goods or services directly linked to the business or professional activity of the taxable person is generally deductible from the amount due in respect of that person's activity.
There are several categories:
* Domestic transactions: health; social security; education; non-profit-making bodies; welfare work; insurance and reinsurance; finance; supplies of non-building land; second and subsequent supplies of buildings; certain leases of property; betting and gaming; public postal services; transactions by public entities in the exercise of their public functions; certain sports activities; transactions associated with intellectual property.
* Exports and like transactions include supplies of goods sent definitively to the Canary Islands, Ceuta or Melilla or definitively exported; supplies of services, including transport, directly linked to the above transactions i.e. only those transactions carried out outside the territory of the Community.
* Supplies of goods intended for another Member State are exempt, if the purchaser is an entrepreneur or professional person identified for VAT purposes in a Member State other than Spain or is a legal person not operating in an entrepreneurial or professional capacity, which is also identified in a Member State other than Spain.
* Transactions relating to special and suspensive customs procedures, for example customs warehouses.
Certain transactions in accordance with international treaties acceded to by Spain (NATO, Vienna Convention).