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Real case · CASH

VAT that gets stuck

Food supplements · 10% VAT on sales
Problem
We sell at the reduced 10% VAT rate, but almost all our costs (advertising, logistics, fees, services) carry 21%. Every quarter we paid more VAT than we charged, and the balance kept building up in our favour. Under the standard regime, the tax office only refunds it at year end: our own money tied up for months.
Decision
Register for the monthly refund scheme (REDEME), accepting what it involves: filing VAT every month and keeping our books through SII.
Result
We recover VAT every month instead of once a year. More admin in exchange for cash that no longer sits idle.
Lesson A business can be profitable and still run out of cash because of VAT. If you sell at a reduced rate and buy at the standard one, check your VAT before anything else.
These are decisions made for specific businesses. What worked here is not a recommendation for yours: every case is different, and that is what the diagnosis is for.
Guides on cash and vat
How to join Spain's SII: who must use it and how to register What Spain's SII is, who must use it, how to opt in with form 036, invoice submission deadlines and how it relates to Verifactu. Read the guide REDEME: how to claim Spanish VAT refunds every month What Spain's REDEME is, who it suits, requirements, how to register with form 036, what it obliges you to do (monthly returns and SII) and refund timing. Read the guide

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