VAT on car rental is the general rate, i.e. 21%. If you have ever rented a car, you will have seen on your invoice what VAT is charged on rental cars: the general rate, with no exceptions of any kind and without the possibility of exemptions.

VAT on car rental

Businesses in the sector have been calling for years for a reduction in the tax rate, as they find it curious that their activity is taxed at 21% VAT while other activities, such as passenger transport or tourist services, are taxed at only 10%.

Car rental in the province of Malaga, where Yellow Car operates, is almost entirely associated with tourist activity. This led the National Federation of Car Rental Companies with and without drivers (FENEVAL) to study the impact of reducing this tax rate in 2020.

FENEVAL estimated that the non-reduction of VAT could lead to the disappearance of hundreds of companies in the sector and the loss of more than 1,500 jobs in 2020 alone. Many car rental companies are SMEs and are in a more difficult position to survive a lasting economic crisis.

Tips for renting a car

So far, public administrations have not considered the request to reduce VAT on car hire, but the good news is that 2021 is proving to be a more active year in the tourism sector.

Thus, the tips for renting a car include knowing in depth what the rental company’s management policies are and selecting a vehicle that is perfectly adapted to the itineraries to be collected. Por otra parte, es importante confiar en una empresa que preste servicio de asistencia en carretera las 24 horas y que de facilidades para la entrega del vehículo en puntos distintos de la geografía: el aeropuerto, las instalaciones de la empresa o la estación de trenes.

Si llegaste aquí preguntándote cuál era el IVA del alquiler de un coche, la respuesta es el general, un tipo del 21%. La petición de reducción en este porcentaje para igualarlo con el de otras actividades turísticas es una demanda histórica del sector.

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