"Is Kit Digital VAT-free?", "Who pays Kit Digital's VAT?", "Can I deduct that VAT?": these are the questions we hear most often from self-employed professionals and SMEs who already have their voucher approved and are about to sign with their digitalization agent. The confusion is understandable: the program is billed as "100% aid," which creates the expectation that there's no added cost at all. The reality, once you check the regulations, is a little different.
What the Grant Covers Exactly (and What It Doesn't)
Kit Digital is governed by Order ETD/1498/2021, of December 29, which approves the program's governing rules. In line with Article 31.8 of Law 38/2003 on General Subsidies, that order establishes that VAT, IGIC (Canary Islands), and IPSI (Ceuta and Melilla) are not eligible expenses. In practice, this means the grant covers the taxable base of the contracted service (the website, the CRM, e-invoicing, etc.), but the beneficiary pays the applicable indirect tax separately, on the invoice issued by the Digitalization Agent.
That's why the question "is Kit Digital legal without VAT?" comes up so often. The answer is yes: it's not that the agent is charging it improperly, it's that the regulation itself excludes VAT from the subsidized portion. There's no loophole or "trick" behind this split; it's a general rule for public subsidies, not some opaque quirk specific to Kit Digital.
Who Pays the VAT and How to Declare It on Form 303
The beneficiary always pays the VAT, not Red.es, and not the digitalization agent out of pocket. If your business is under the general VAT regime, the VAT charged on the agent's invoice is declared and deducted exactly the same way as on any other business purchase or professional service: it's included in your quarterly return (Form 303) as part of the period's deductible input VAT, as long as the invoice meets the usual formal requirements (tax ID, breakdown of base and VAT, a clear description).
If your business is under the simplified VAT regime ("módulos"), the deduction is subject to that regime's general limits, which aren't specific to Kit Digital but to how VAT under modules works generally. In any case, we haven't found any official ruling from the Directorate-General for Taxes (Dirección General de Tributos) that sets out a special deduction rule for VAT on services partly funded by a public subsidy: the general logic behind the right to deduct input VAT (governed by Articles 92 and following of Law 37/1992) is that it's deductible regardless of whether the cost of the service is subsidized, because what's being subsidized is the beneficiary's expense, not the price charged by the provider.
You might be interested in: Kit Digital for the self-employed: grants of up to €2,000 · Kit Digital segments: grant amounts by company size.
How the Grant Is Taxed Under Personal Income Tax (IRPF) or Corporate Tax
Here's the part most self-employed professionals overlook: the grant amount itself is not tax-exempt income. According to binding ruling V0822-24, of April 22, 2024, issued by the Directorate-General for Taxes, the Kit Digital grant is classified as income from a business activity (Article 27.1 of the Personal Income Tax Law, IRPF) for self-employed professionals, and similarly as income under Corporate Tax for companies.
When exactly you declare that income isn't always the same, and it depends on what the grant is funding:
- If it funds a current expense (for example, social media management or a SaaS subscription over twelve months), the income is allocated to the tax year in which the corresponding expense accrues.
- If it funds an asset (custom software, an ERP, or equipment under the Secure Workstation ("Puesto de Trabajo Seguro") category), the income is allocated proportionally to that asset's depreciation, rather than all at once in the year the grant is awarded.
For self-employed professionals under the objective assessment regime (Spanish "módulos"), there may be additional nuances in how the grant affects the calculation of net income; we weren't able to verify the exact details in an official source within the time available for this article, so if you're taxed under modules, check with your accountant or tax advisor about the specific treatment for your case before filing.
Form 130 and Form 100 (Annual Income Tax Return)
For self-employed professionals under direct estimation, the income from the grant is added to the operating income on the quarterly installment payment (Form 130) for the quarter that corresponds under the timing rules explained above. On Form 100 (the annual personal income tax return), that same amount is part of the net income from your business activity. We haven't found an official source from the Tax Agency setting out a separate, specific box for "Kit Digital grants": it's declared alongside the rest of your business income, under whichever heading applies to you. If you have questions about specific boxes in your tax return, your accountant can point you to the exact location for your regime.
Canary Islands: IGIC Is Not a Full Exemption
In the Canary Islands, indirect taxes are excluded from the grant the same way as in the rest of Spain, but with IGIC instead of VAT: Order ETD/1498/2021 also excludes IGIC from the subsidized portion. In other words, the Canary Islands beneficiary pays IGIC separately, exactly as mainland beneficiaries pay VAT.
Claims circulate online that Kit Digital in the Canary Islands is "tax-free" thanks to the islands' special Economic and Fiscal Regime (REF). We weren't able to verify that interpretation in any official source from Red.es or the Tax Agency within the time frame of this research: the reverse-charge mechanism that sometimes applies to specific REF transactions doesn't automatically translate into "no IGIC" for every digitalization agent service. If your company is in the Canary Islands, confirm the exact treatment for your case with your tax advisor before relying on that simplification.
In Short: What to Do with Your Kit Digital Invoice
Always keep the complete invoice from your Digitalization Agent, with the taxable base and VAT (or IGIC) broken out separately. Pass that invoice on to your accountant in the corresponding quarter so the input VAT is included on Form 303 and the grant income is correctly accounted for under your IRPF or Corporate Tax. And for any question specific to your situation — modules regime, the VAT pro rata rule, exempt activity — the best source isn't a general article like this one, but your tax advisor, with your actual business details in front of them.
Keep in mind that the application calls have been closed since October 31, 2025; this guide applies to the invoice for a voucher that's already been granted. Last reviewed: July 13, 2026.