The new VAT rate on necessities
- 02 January 2023
- Business Consultancy
As of 1 January 2023, a newly Value Added Tax regulation, popularly known by its acronym: VAT, will come into force for certain food products, most of which are necessities.
This temporary regulation of Royal Decree 20/2022 will take effect for 6 months, from 1 January 2023 to 30 June 2023.
1. The percentage of the tax is changed and is set at 5% for the products: olive oil and others then and pasta.
If the annual inflation rate for March ( which will be published in April) is less than 5.5%, in May these products will have to bear a VAT rate of 10%.
2. A 0% tax will be applied for the following products:
- Plain bread, frozen plain bread dough intended exclusively for the production of this type of bread and frozen plain bread.
- Bread-making flour
- Milk produced by animals in the following variations: natural, certified, pasteurised, concentrated, skimmed, sterilised, UHT, evaporated and powdered.
- Cheese
- Eggs
- Fruits, vegetables, legumes, tubers and cereals that are classified as natural products according to the Food Code.
As with products with a VAT rate of 5%, if the results of the annual inflation rate from March are less than 5.5%, starting from 1 May these products will be subject to a VAT rate of 4%.
This reduction in Value Added Tax is designed so that it is the consumer who benefits completely, therefore, the distribution companies will not be able to increase the profit margin, in other words, they will not be able to maintain prices to obtain more profits, so the prices of the chain of deliveries, imports and acquisitions will have to appreciate this reduction.
If you have any questions or need more information, you can contact us by calling:
933 03 060 (Barcelona)
972 505 100 (Figueres)
972 940 940 (Girona)
