VAT-free day · the honest number
A shop can’t legally drop VAT — it divides the price by 1 + the rate. So a “VAT-free” claim is a smaller discount than it sounds. Here’s the true number.
The arithmetic
When a retailer runs a “VAT-free day”, it still charges VAT to the tax office — the promotion just means the customer pays what the item would cost without the VAT component. Mathematically the shop takes the normal, VAT-inclusive price and divides it by (1 + rate/100).
Because the saving is measured against the higher, tax-inclusive price, the real discount is always rate ÷ (100 + rate), not the rate itself. It sounds like 21% off; it’s 17.36% off.
A €100 item on a Spanish “día sin IVA”: you pay €100 ÷ 1.21 = €82.64, saving €17.36. That’s a real 17.36% discount — 3.64 points less than the “21%” the campaign implies. Real discount = cash saved ÷ advertised price × 100.
VAT-free day questions