New VAT rates for certain products from 1 January 2023. Royal Decree-Law 20/2022 of 27 December on measures to respond to the economic and social consequences of the war in Ukraine and support for the reconstruction of the island of La Palma and other situations of vulnerability was published on this date, whose Article 72 provides the following:
Article 72. Temporarily applicable Value Added Tax rate on certain deliveries, imports and intra-community acquisitions of food, as well as for the purposes of sales equalisation
With effect from 1 January 2023 and valid until 30 June 2023:
1. A 5% Value Added Tax rate will be applied to deliveries, imports and intra-community acquisitions of the following products:
a) Olive and seed oils.
b) Pasta.
The sales equalisation rate applicable to these operations will be 0.625%.
However, the applicable tax rate will be 10% from 1 May 2023 should the YoY underlying rate of inflation for the month of March, published in April, be under 5.5%. In this case, the sales equalisation rate applicable to these operations will be 1.4%.
2. Zero Value Added Tax will be applied to deliveries, imports and intra-community acquisitions of the following products:
a) Bread, as well as frozen bread dough and frozen bread intended exclusively for the making of bread.
b) Bread flours.
c) The following types of milk produced by any animal species: natural, certified, pasteurised, condensed, skimmed, sterilised, UHT, evaporated and powdered.
d) Cheese.
d) Eggs.
f) Fruits, vegetables, legumes, tubers and cereals, which have the status of natural products in accordance with the Food Code and the provisions issued for its development.
The sales equalisation rate applicable to these operations will be 0%. However, the applicable tax rate will be 4% from 1 May 2023 should the YoY underlying rate of inflation for the month of March, published in April, be under 5.5%. In this case, the sales equalisation rate applicable to these operations will be 0.5%.
3. The reductions in the tax rate are for the benefit of consumers, therefore the reductions cannot be used in full or in part to increase business profit margins by means of a consequent increase in prices along the production, distribution or consumption chains of the products, notwithstanding the additional commitments assumed and advertised by the affected sectors, for social responsibility. The effectiveness of this measure will be verified by a system that monitors the evolution of prices, irrespective of the actions that correspond to the National Markets and Competition Commission within the scope of its powers.
Logistic – Customs
