Reduction of IVA on Certain foods Extended

The tax rate of value added tax temporarily applicable to certain deliveries, imports and intra-community acquisitions of food, as well as for the purposes of the equivalence surcharge

With effect from July 1, 2023 and valid until December 31, 2023:

1. The rate of 5 percent of the value added tax will be applied to deliveries, imports and intra-community acquisitions of the following products:
a) Olive and seed oils.
b) Pasta.
The rate of the equivalence surcharge applicable to these operations will be 0.62 percent.

However, the tax rate applicable to 10 percent as of November 1, 2023, in the event that the year-on-year rate will be of underlying inflation for the month of September, published in October, is less than 5.5 percent. hundred. In this case, the rate of the equivalence surcharge applicable to these operations will be 1.4 percent.

2. The rate of 0 percent of the value added tax will be applied to deliveries, imports and intra-community acquisitions of the following products:
a) Common bread, as well as frozen common bread dough and frozen common bread intended exclusively for making common bread.
b) Bread flours.
c) The following types of milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered.
d) cheeses.
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 rate of the equivalence surcharge applicable to these operations will be 0 percent.

However, the applicable tax rate will be 4 percent as of November 1, 2023, in the event that the interannual rate of underlying inflation for the month of September, published in October, is less than 5, 5 percent. In this case, the rate of the equivalency surcharge applicable to these operations will be 0.5 percent.

3. The reduction in the tax rate will fully benefit the consumer, without, therefore, the amount of the reduction being able to be totally or partially used to increase the business profit margin with the consequent increase in prices in the production, distribution or consumption of the products, without prejudice to the additional commitments assumed and advertised by the affected sectors, for social responsibility.

The effectiveness of this measure will be verified by means of a system for monitoring the evolution of prices, regardless of the actions that correspond to the National Commission for Markets and Competition within the scope of its powers.

Single final provision.– Entry into force July 25-2023.

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Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.