Spain – Reduction in VAT rate on basic food items extended until 31st December 2023.

Spain have extended the 0% VAT rate introduced on basic food items until 31 December 2023 due to continuing inflation, this measure was due to expire on 30th June 2023.

The 0% VAT rate will continue to apply to basic food items until 31st December 2023, after which it will revert to the previous VAT rate of 4%.

Food products subject to 0% VAT rate include the following:

Common bread, as well as frozen common bread dough and frozen common bread intended exclusively for making common bread, and bread flours.

Milk produced by any animal species: natural, certified, pasteurised, concentrated, skimmed, sterilised, UHT, evaporated and powdered.

Cheeses and eggs.

Fruits, vegetables, legumes, tubers and cereals, which have the status of natural products in accordance with the Food Code.

The reduced VAT rate of 5% which applies to olive oil, seed oils, and pasta products which was also due to expire on 30th June 2023, has been extended until 31 December 2023, after which it will revert to the previous VAT rate of 10%.

The above reduced VAT rates will only apply until 31st December 2023, subject to inflation for September 2023 remaining above 5.5%. If inflation is below 5.5% for September 2023, the above reduction in VAT rates will revert to 4% and 10% respectively from 1st November 2023.