Temporary Reduced VAT Rates in Spain 2024
On 30 September 2024 ended the temporary zero VAT rate on essential foodstuffs in Spain. These products are now subject to 2% VAT rate, and will be back to reduced rate 4% by 2025. Also, the olive oil is planned to be considered within the list of essential foodstuffs.
Temporary Reduced VAT rates in Spain
The Spanish Government has introduced temporary VAT rate changes since 2023 to help reduce the impact of high inflation caused by the Ukraine war on Spanish families. These measures include a temporary 0% VAT on basic foodstuffs, and new VAT rates of 5% and 7.5%. A gradual return to previous VAT rates is also planned. Below are the latest updates, along with a link to the legislative text regulating these changes.
The temporary 0% VAT rate for certain basic foodstuffs applicable until 30 September 2024 is now coming to an end. However, starting from October 1, 2024 and until December 31, 2024, the new applicable VAT rate will increase to 2%. The basic foodstuffs included in the temporary 2% VAT rate are the following:
- Common bread, including frozen bread.
- Flour for bread.
- Animal milk
- Cheese
- Eggs
- Fruits, vegetables, legumes, and cereals that are considered natural products.
- Olive oil
Separately, the supplies of specific products, namely seed oils and pasta, previously subject to a temporary 5%, are now subject to 7.5% VAT rate, effective from October 1, 2024 and until December 31, 2024. This update represents a 2.5 point increase in the tax rate applicable to these products from 1 July 2024.
Finally, the regulation foresees the introduction of olive oil in the list of essential products benefitting from a super reduced VAT rate of 4%, and currently subject to 2% taxation. This will take effect as of 1 January 2025, upon finalization of the temporary measures.
Have a look at our Spanish VAT manual, including an overview of Spanish VAT rates.
VAT Rate For Energy Products
Additionally, the VAT rate for certain energy products changed since 1 January 2024.
- Electricity was raised from 5% (temporary reduced rate during 2023) to 10% VAT rate from 1 January to 31 December 2024.
- Natural gas and wood for energy are also subject to 10% VAT rate from 1 January to 31 March 2024, instead of the former 5%.
During 2023, the Government applied a special 5% VAT rate applicable on certain energy supplies.