Taxes

Value-added tax, similar to sales tax, is called I.V.A. in Spain (pronounced "ee-vah," for impuesto sobre el valor añadido). It's levied on both products and services, such as hotel rooms and restaurant meals. When in doubt about whether tax is included, ask, "¿Está incluido el I.V.A.?" The I.V.A. rate for hotels and restaurants is currently 10%, regardless of their number of stars. A special tax law for the Canary Islands allows hotels and restaurants there to charge 7% I.V.A. Menus will generally note at the bottom whether tax is included ("I.V.A. incluido") or not ("más 10% I.V.A.").

Although food, pharmaceuticals, and household items are taxed at the lowest rate (4%), most consumer goods are now taxed at 21%. A number of shops participate in Global Refund (formerly Europe Tax-Free Shopping), a VAT refund service that makes getting your money back relatively hassle-free. You cannot get a refund on the VAT for such items as meals or services such as hotel accommodations or taxi fares.

Global Blue is a Europewide service with 300,000 affiliated stores and more than 700 refund counters at major airports and border crossings. The refund form, called a Tax Free Check or Refund Cheque, is the most common across the European continent. The service issues refunds in the form of cash, check, or credit-card adjustment.