Index
What is the reduced VAT rate of 4% and what does the law say
Who can benefit from this reduction
Legal requirements to apply VAT at 4%
How to apply for the reduced VAT: step by step
What the dealership must do
Other tax exemptions: registration and road tax
Can it be applied to second-hand cars?
What happens if the car is sold before 4 years
Common mistakes in the application of reduced VAT
Conclusion
Frequently asked questions
People with disabilities and reduced mobility are entitled to buy a vehicle with a VAT rate of 4% instead of the general 21%. On a 20,000 euro car, this represents a saving of 3,400 euros. However, this tax relief remains fairly unknown, partly because the Treasury does not communicate it clearly and the application process raises doubts for both the buyer and the dealership.
This article explains who can benefit, what requirements the law demands, how to apply for the reduced VAT step by step (with the exact forms) and what the dealership must take into account to apply it correctly on the invoice. We also cover other associated tax exemptions (registration tax and road tax) that can add to the savings.
What is the reduced VAT rate of 4% and what does the law say
The super-reduced VAT rate of 4% for vehicles destined for the transport of people with disabilities is set out in article 91.Dos.1.4.º of the Spanish VAT Law 37/1992. It is not an aid or a subsidy: it is a tax right that can be exercised as long as the legal requirements are met.
Under normal conditions, the purchase of a car is taxed at 21% VAT. With this reduction, the rate drops to 4%, which represents a direct saving proportional to the price of the vehicle. The more expensive the car, the greater the saving. And as a relevant fact: the Treasury does not set a financial limit on the price of the vehicle to benefit from this reduction.
This benefit applies both to the purchase and to adaptations or repairs linked to the disability.
Who can benefit from this reduction
The following people can apply for the reduced VAT at 4%:
People with certified reduced mobility. Reduced mobility is measured by a score that appears at the bottom of the disability certificate. It does not depend directly on the percentage of disability, but on the mobility score. The Treasury may require 7 points or more on the mobility scale to grant the reduction.
Holders of a parking card for people with disabilities. People who have a parking card issued by their Local Corporation or Autonomous Community are considered, in any case, people with reduced mobility. They must also have the certificate from IMSERSO or the competent body of their autonomous community.
Members of the ONCE. Visually impaired people who are members of ONCE are also considered beneficiaries of this reduction.
Pensioners for total permanent, absolute disability or severe disability. They can also qualify, provided they prove their reduced mobility status.
It is important to bear in mind that the specific conditions may vary slightly depending on the Autonomous Community, as the management of the disability certificate is a regional responsibility.
Legal requirements to apply VAT at 4%
The regulations establish three requirements that must be met simultaneously:
Habitual destination. The vehicle must be intended for the habitual transport of the person with disability. Occasional use is not enough: it must be the main means of transport.
Minimum period between purchases. At least 4 years must have elapsed since the last acquisition of a vehicle under similar conditions with reduced VAT. There is an exception: if the previous vehicle has suffered a total loss (certified by the insurer) or has been permanently decommissioned, this period is not required.
Ownership. The vehicle can be in the name of the person with disability, their spouse, a relative in a direct or collateral line up to the third degree, their registered common-law partner, their guardian, legal representative or de facto guardian. The binding ruling V0072-25 of the Directorate General of Taxes (February 2025) confirmed that the vehicle can be driven by family members (children, for example) as long as it is justified that the habitual use is the transport of the person with disability.
Our practical recommendation: although the law allows ownership by family members, to avoid problems with the Treasury it is preferable that the vehicle owner be the beneficiary of the reduction themselves.
How to apply for the reduced VAT: step by step
The 4% VAT is not applied automatically. It must be requested before purchasing the vehicle. This is the process:
Step 1: Obtain the disability certificate. If the person does not have it yet, they must request it at the IMSERSO Base Centres or the competent body of their Autonomous Community. This involves passing a medical assessment to determine the degree of disability and the mobility score. The time to obtain it varies depending on the autonomous community (it can take from a few weeks to several months).
Step 2: Present Form 04 at the Tax Agency. This is the specific form to request the application of the super-reduced VAT rate. It can be submitted electronically (with a digital certificate) or in person at the corresponding tax office. It must be accompanied by the supporting documentation.
Step 3: Provide the required documentation. Together with Form 04, you must present the updated disability certificate showing the mobility score, documentation proving the relationship with the person with disability (if the applicant is a family member), the proforma invoice or budget of the vehicle with the price without taxes itemised and, if available, the parking card for people with disabilities.
Step 4: Receive a favourable resolution from the Treasury. Once the documentation has been reviewed, the Treasury issues a resolution certifying the right to apply the 4% VAT for that specific purchase.
Step 5: Hand over the resolution to the dealership. With this resolution in hand, the buyer delivers it to the dealership, which will invoice the vehicle applying 4% VAT instead of 21%.
What the dealership must do
For the dealership, correctly managing a sale with reduced VAT at 4% requires attention to several points:
Verify the Treasury's resolution. Before issuing the invoice with the reduced rate, the dealership must check that the buyer has the favourable resolution of Form 04 issued by the Tax Agency. Without this document, the 4% cannot be applied.
Issue the invoice with the correct VAT. The invoice must reflect the 4% tax rate with the corresponding mention. It is advisable to include a reference to the Treasury's resolution on the invoice itself or as an attached document.
Keep a copy of the documentation. The dealership must keep a copy of the Treasury's resolution and the buyer's disability certificate. This documentation justifies the application of the reduced rate in the event of an inspection.
Important regarding REBU and reduced VAT. If the transaction is carried out under the Special Scheme for Second-Hand Goods (REBU), the VAT is not broken down on the invoice and is already applied to the margin. In this case, the 4% reduction is applied to the margin, not to the total price. This is a point that causes confusion: consult your tax advisor if you have questions about how to combine REBU and reduced VAT in the same transaction. To better understand how invoicing with REBU works, we recommend our guide on when to use a VAT invoice and when to use REBU.
Other tax exemptions: registration and road tax
Reduced VAT is not the only tax advantage for people with disabilities who purchase a vehicle. There are two additional exemptions that can be added:
Exemption from Registration Tax. Registration tax ranges between 4.75% and 14.75% depending on the vehicle's CO2 emissions. People with disabilities can be exempt from this tax. To apply for it, Form 05 must be submitted to the Tax Agency before registering the vehicle. The requirements are similar to those for reduced VAT (disability certificate, habitual use, 4-year period). If you want to know the complete registration process, we explain it in our article on how long it takes to register a car in Spain.
Exemption from Road Tax (IVTM). Road tax is a municipal tax paid annually. People with disabilities can apply for the exemption at their town hall. The requirements and process vary depending on the municipality, but generally a disability certificate is required and the vehicle must be in the name of the beneficiary.
Total accumulated savings. Combining the three exemptions (4% VAT, registration exemption, and road tax exemption), the savings on a 20,000 euro car can exceed 4,000 euros in the first year and continue to generate annual savings through the IVTM exemption.
Can it be applied to second-hand cars?
Yes. The reduced VAT of 4% can be applied to both new and used vehicles, as long as the purchase is made from a professional (dealership) that issues an invoice. The application process is exactly the same: Form 04, supporting documentation and the Treasury's resolution.
For transactions between private individuals, VAT is not applied (Property Transfer Tax is paid), so this reduction is only relevant when the seller is a professional.
In transactions between private individuals, Property Transfer Tax (ITP) is paid, not VAT, meaning this reduction only applies when dealing with professionals.
For second-hand car dealers, this means they can and must apply the 4% rate if the buyer presents the Treasury's resolution. This is a sales argument worth knowing and pro-actively communicating to clients who mention it.
What happens if the car is sold before 4 years
This is a point that both the buyer and the advising dealership should understand very clearly:
Sale before 4 years. If the vehicle acquired with reduced VAT is sold before 4 years have elapsed since purchase, the Treasury can demand payment of the VAT difference not paid at the time (the difference between 21% and 4% on the original purchase price).
Before selling, it is also recommended to check that the vehicle has no pending outstanding charges. We explain this in our guide on how to check if a car has liens or charges.
Sale after 4 years. If 4 or more years have passed since the purchase, the sale is completely unrestricted and the Treasury cannot claim anything.
Exception for total loss. If the vehicle suffers a total loss certified by the insurer, another one can be purchased with reduced VAT without waiting clinical 4 years.
Common mistakes in the application of reduced VAT
Applying 4% without the Treasury's resolution. The dealership cannot apply the reduced rate solely with the buyer's disability certificate. It requires the specific resolution of Form 04. Without it, an inspection might demand the VAT difference from the dealership.
Confusing disability percentage with reduced mobility. What matters to the Treasury is not so much the percentage of disability as the mobility score on the certificate. A client could have a 65% disability but not meet the mobility criteria, and vice versa.
Not informing the client about the other exemptions. Many buyers are unaware that, in addition to VAT, they may be exempt from registration tax (Form 05) and IVTM. A good dealership informs them about all three.
Not keeping supporting documentation. If the Treasury audits and the dealership cannot prove the resolution of Form 04, they may have to bear the VAT difference. Always keep a copy of the resolution and the certificate.
Selling another car with reduced VAT before 4 years to the same client. The 4-year period is per beneficiary, not per vehicle. If a client bought a car with 4% VAT 2 years ago, they cannot do so again until the term has expired, except in the case of a total loss of the previous one.
If you want to avoid tax mistakes beyond the reduced VAT, consult our guide on common mistakes when applying the REBU in dealerships.
Conclusion
The reduced VAT at 4% is an important tax right that can mean savings of thousands of euros for people with disabilities and reduced mobility. For the dealership, knowing this regulation well is not only a tax obligation but an opportunity to advise clients better and stand out as a professional. The key lies in always verifying the resolution of Form 04, issuing the invoice correctly and keeping the documentation.
More than 500 dealerships are already using Dealcar to manage their invoicing.
From the platform you can issue invoices with any tax rate (21%, 4% or REBU), link documentation to the vehicle file and have everything ready for any inspection. If you want to see how it works, you can explore Dealcar's invoicing module. If you would like more information, request a free demo.
Frequently asked questions
Does the 4% VAT also apply to second-hand cars?
Yes. It applies to any vehicle purchased from a professional who issues an invoice with VAT, whether new or used. The application process is the same. In purchases between private individuals it does not apply because there is no VAT, but ITP.
Can someone other than the disabled person drive the car?
Yes. The binding ruling V0072-25 of the Directorate General of Taxes confirmed that family members (children, spouse, etc.) can drive the vehicle as long as it is justified that the habitual use is the transport of the person with disability.
What mobility score is needed?
There is no universal legal minimum, but the Treasury usually requires 7 points or more on the mobility scale. This score appears at the bottom of the disability certificate and is different from the disability percentage.
How much is saved in total by combining all exemptions?
It depends on the car's price, but on a 20,000 euro vehicle, the saving from reduced VAT is about 3,400 euros, plus the registration tax exemption (between 950 and 2,950 euros depending on emissions) and the annual IVTM exemption (variable according to municipality, approximately between 50 and 300 euros/year).
Can the dealership apply the 4% directly if the customer has a disability certificate?
No. The dealership needs the favourable resolution of Form 04 issued by the Tax Agency. The disability certificate alone is not sufficient to justify the application of the reduced rate.
What happens if I need to sell the car before 4 years?
The Treasury can claim the VAT difference (the difference between the 21% and the 4% applied to the purchase price). If more than 4 years have passed, the sale is unrestricted without any claim.
Index
What is the reduced VAT rate of 4% and what does the law say
Who can benefit from this reduction
Legal requirements to apply VAT at 4%
How to apply for the reduced VAT: step by step
What the dealership must do
Other tax exemptions: registration and road tax
Can it be applied to second-hand cars?
What happens if the car is sold before 4 years
Common mistakes in the application of reduced VAT
Conclusion
Frequently asked questions
People with disabilities and reduced mobility are entitled to buy a vehicle with a VAT rate of 4% instead of the general 21%. On a 20,000 euro car, this represents a saving of 3,400 euros. However, this tax relief remains fairly unknown, partly because the Treasury does not communicate it clearly and the application process raises doubts for both the buyer and the dealership.
This article explains who can benefit, what requirements the law demands, how to apply for the reduced VAT step by step (with the exact forms) and what the dealership must take into account to apply it correctly on the invoice. We also cover other associated tax exemptions (registration tax and road tax) that can add to the savings.
What is the reduced VAT rate of 4% and what does the law say
The super-reduced VAT rate of 4% for vehicles destined for the transport of people with disabilities is set out in article 91.Dos.1.4.º of the Spanish VAT Law 37/1992. It is not an aid or a subsidy: it is a tax right that can be exercised as long as the legal requirements are met.
Under normal conditions, the purchase of a car is taxed at 21% VAT. With this reduction, the rate drops to 4%, which represents a direct saving proportional to the price of the vehicle. The more expensive the car, the greater the saving. And as a relevant fact: the Treasury does not set a financial limit on the price of the vehicle to benefit from this reduction.
This benefit applies both to the purchase and to adaptations or repairs linked to the disability.
Who can benefit from this reduction
The following people can apply for the reduced VAT at 4%:
People with certified reduced mobility. Reduced mobility is measured by a score that appears at the bottom of the disability certificate. It does not depend directly on the percentage of disability, but on the mobility score. The Treasury may require 7 points or more on the mobility scale to grant the reduction.
Holders of a parking card for people with disabilities. People who have a parking card issued by their Local Corporation or Autonomous Community are considered, in any case, people with reduced mobility. They must also have the certificate from IMSERSO or the competent body of their autonomous community.
Members of the ONCE. Visually impaired people who are members of ONCE are also considered beneficiaries of this reduction.
Pensioners for total permanent, absolute disability or severe disability. They can also qualify, provided they prove their reduced mobility status.
It is important to bear in mind that the specific conditions may vary slightly depending on the Autonomous Community, as the management of the disability certificate is a regional responsibility.
Legal requirements to apply VAT at 4%
The regulations establish three requirements that must be met simultaneously:
Habitual destination. The vehicle must be intended for the habitual transport of the person with disability. Occasional use is not enough: it must be the main means of transport.
Minimum period between purchases. At least 4 years must have elapsed since the last acquisition of a vehicle under similar conditions with reduced VAT. There is an exception: if the previous vehicle has suffered a total loss (certified by the insurer) or has been permanently decommissioned, this period is not required.
Ownership. The vehicle can be in the name of the person with disability, their spouse, a relative in a direct or collateral line up to the third degree, their registered common-law partner, their guardian, legal representative or de facto guardian. The binding ruling V0072-25 of the Directorate General of Taxes (February 2025) confirmed that the vehicle can be driven by family members (children, for example) as long as it is justified that the habitual use is the transport of the person with disability.
Our practical recommendation: although the law allows ownership by family members, to avoid problems with the Treasury it is preferable that the vehicle owner be the beneficiary of the reduction themselves.
How to apply for the reduced VAT: step by step
The 4% VAT is not applied automatically. It must be requested before purchasing the vehicle. This is the process:
Step 1: Obtain the disability certificate. If the person does not have it yet, they must request it at the IMSERSO Base Centres or the competent body of their Autonomous Community. This involves passing a medical assessment to determine the degree of disability and the mobility score. The time to obtain it varies depending on the autonomous community (it can take from a few weeks to several months).
Step 2: Present Form 04 at the Tax Agency. This is the specific form to request the application of the super-reduced VAT rate. It can be submitted electronically (with a digital certificate) or in person at the corresponding tax office. It must be accompanied by the supporting documentation.
Step 3: Provide the required documentation. Together with Form 04, you must present the updated disability certificate showing the mobility score, documentation proving the relationship with the person with disability (if the applicant is a family member), the proforma invoice or budget of the vehicle with the price without taxes itemised and, if available, the parking card for people with disabilities.
Step 4: Receive a favourable resolution from the Treasury. Once the documentation has been reviewed, the Treasury issues a resolution certifying the right to apply the 4% VAT for that specific purchase.
Step 5: Hand over the resolution to the dealership. With this resolution in hand, the buyer delivers it to the dealership, which will invoice the vehicle applying 4% VAT instead of 21%.
What the dealership must do
For the dealership, correctly managing a sale with reduced VAT at 4% requires attention to several points:
Verify the Treasury's resolution. Before issuing the invoice with the reduced rate, the dealership must check that the buyer has the favourable resolution of Form 04 issued by the Tax Agency. Without this document, the 4% cannot be applied.
Issue the invoice with the correct VAT. The invoice must reflect the 4% tax rate with the corresponding mention. It is advisable to include a reference to the Treasury's resolution on the invoice itself or as an attached document.
Keep a copy of the documentation. The dealership must keep a copy of the Treasury's resolution and the buyer's disability certificate. This documentation justifies the application of the reduced rate in the event of an inspection.
Important regarding REBU and reduced VAT. If the transaction is carried out under the Special Scheme for Second-Hand Goods (REBU), the VAT is not broken down on the invoice and is already applied to the margin. In this case, the 4% reduction is applied to the margin, not to the total price. This is a point that causes confusion: consult your tax advisor if you have questions about how to combine REBU and reduced VAT in the same transaction. To better understand how invoicing with REBU works, we recommend our guide on when to use a VAT invoice and when to use REBU.
Other tax exemptions: registration and road tax
Reduced VAT is not the only tax advantage for people with disabilities who purchase a vehicle. There are two additional exemptions that can be added:
Exemption from Registration Tax. Registration tax ranges between 4.75% and 14.75% depending on the vehicle's CO2 emissions. People with disabilities can be exempt from this tax. To apply for it, Form 05 must be submitted to the Tax Agency before registering the vehicle. The requirements are similar to those for reduced VAT (disability certificate, habitual use, 4-year period). If you want to know the complete registration process, we explain it in our article on how long it takes to register a car in Spain.
Exemption from Road Tax (IVTM). Road tax is a municipal tax paid annually. People with disabilities can apply for the exemption at their town hall. The requirements and process vary depending on the municipality, but generally a disability certificate is required and the vehicle must be in the name of the beneficiary.
Total accumulated savings. Combining the three exemptions (4% VAT, registration exemption, and road tax exemption), the savings on a 20,000 euro car can exceed 4,000 euros in the first year and continue to generate annual savings through the IVTM exemption.
Can it be applied to second-hand cars?
Yes. The reduced VAT of 4% can be applied to both new and used vehicles, as long as the purchase is made from a professional (dealership) that issues an invoice. The application process is exactly the same: Form 04, supporting documentation and the Treasury's resolution.
For transactions between private individuals, VAT is not applied (Property Transfer Tax is paid), so this reduction is only relevant when the seller is a professional.
In transactions between private individuals, Property Transfer Tax (ITP) is paid, not VAT, meaning this reduction only applies when dealing with professionals.
For second-hand car dealers, this means they can and must apply the 4% rate if the buyer presents the Treasury's resolution. This is a sales argument worth knowing and pro-actively communicating to clients who mention it.
What happens if the car is sold before 4 years
This is a point that both the buyer and the advising dealership should understand very clearly:
Sale before 4 years. If the vehicle acquired with reduced VAT is sold before 4 years have elapsed since purchase, the Treasury can demand payment of the VAT difference not paid at the time (the difference between 21% and 4% on the original purchase price).
Before selling, it is also recommended to check that the vehicle has no pending outstanding charges. We explain this in our guide on how to check if a car has liens or charges.
Sale after 4 years. If 4 or more years have passed since the purchase, the sale is completely unrestricted and the Treasury cannot claim anything.
Exception for total loss. If the vehicle suffers a total loss certified by the insurer, another one can be purchased with reduced VAT without waiting clinical 4 years.
Common mistakes in the application of reduced VAT
Applying 4% without the Treasury's resolution. The dealership cannot apply the reduced rate solely with the buyer's disability certificate. It requires the specific resolution of Form 04. Without it, an inspection might demand the VAT difference from the dealership.
Confusing disability percentage with reduced mobility. What matters to the Treasury is not so much the percentage of disability as the mobility score on the certificate. A client could have a 65% disability but not meet the mobility criteria, and vice versa.
Not informing the client about the other exemptions. Many buyers are unaware that, in addition to VAT, they may be exempt from registration tax (Form 05) and IVTM. A good dealership informs them about all three.
Not keeping supporting documentation. If the Treasury audits and the dealership cannot prove the resolution of Form 04, they may have to bear the VAT difference. Always keep a copy of the resolution and the certificate.
Selling another car with reduced VAT before 4 years to the same client. The 4-year period is per beneficiary, not per vehicle. If a client bought a car with 4% VAT 2 years ago, they cannot do so again until the term has expired, except in the case of a total loss of the previous one.
If you want to avoid tax mistakes beyond the reduced VAT, consult our guide on common mistakes when applying the REBU in dealerships.
Conclusion
The reduced VAT at 4% is an important tax right that can mean savings of thousands of euros for people with disabilities and reduced mobility. For the dealership, knowing this regulation well is not only a tax obligation but an opportunity to advise clients better and stand out as a professional. The key lies in always verifying the resolution of Form 04, issuing the invoice correctly and keeping the documentation.
More than 500 dealerships are already using Dealcar to manage their invoicing.
From the platform you can issue invoices with any tax rate (21%, 4% or REBU), link documentation to the vehicle file and have everything ready for any inspection. If you want to see how it works, you can explore Dealcar's invoicing module. If you would like more information, request a free demo.
Frequently asked questions
Does the 4% VAT also apply to second-hand cars?
Yes. It applies to any vehicle purchased from a professional who issues an invoice with VAT, whether new or used. The application process is the same. In purchases between private individuals it does not apply because there is no VAT, but ITP.
Can someone other than the disabled person drive the car?
Yes. The binding ruling V0072-25 of the Directorate General of Taxes confirmed that family members (children, spouse, etc.) can drive the vehicle as long as it is justified that the habitual use is the transport of the person with disability.
What mobility score is needed?
There is no universal legal minimum, but the Treasury usually requires 7 points or more on the mobility scale. This score appears at the bottom of the disability certificate and is different from the disability percentage.
How much is saved in total by combining all exemptions?
It depends on the car's price, but on a 20,000 euro vehicle, the saving from reduced VAT is about 3,400 euros, plus the registration tax exemption (between 950 and 2,950 euros depending on emissions) and the annual IVTM exemption (variable according to municipality, approximately between 50 and 300 euros/year).
Can the dealership apply the 4% directly if the customer has a disability certificate?
No. The dealership needs the favourable resolution of Form 04 issued by the Tax Agency. The disability certificate alone is not sufficient to justify the application of the reduced rate.
What happens if I need to sell the car before 4 years?
The Treasury can claim the VAT difference (the difference between the 21% and the 4% applied to the purchase price). If more than 4 years have passed, the sale is unrestricted without any claim.
