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Main tax changes introduced by Royal Decree-Law 20/2022 – Reduced VAT rates

Main tax changes introduced by Royal Decree-Law 20/2022 of 27 December on measures in response 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

The following amendments are made to Law 37/1992 of 28 December 1992 on Value Added Tax (LIVA):

Natural gas, briquettes, pellets and firewood

With effect from 1 January 2023 and valid until 31 December 2023, the VAT rate of 5 per cent shall apply to supplies, imports and intra-Community acquisitions of natural gas, briquettes and pellets from biomass and firewood.

The rate of the equivalence surcharge applicable, during the period referred to in the previous paragraph, to supplies of briquettes and pellets from biomass and wood for firewood shall be 0.625 per cent.

Masks, In Vitro Diagnostics and Vaccines Sars Cov-2

With effect from 1 January 2023, the first additional provision of Royal Decree-Law 29/2021, of 21 December, which adopts urgent measures in the energy field to promote electric mobility, self-consumption and the deployment of renewable energies, is amended, with the following effects:

  • The application of the tax rate of 4 per cent of VAT on deliveries, imports and intra-Community acquisitions of the disposable surgical masks referred to in the Agreement of the Interministerial Commission on Drug Prices of 12 November 2020, provided for in Article 7 of Royal Decree-Law 34/2020 of 17 November on urgent measures to support business solvency and the energy sector, and on tax matters, is extended until 30 June 2023.
  • The application of the tax rate of 0 per cent of VAT to supplies, imports and intra-Community acquisitions of certain goods and services necessary to combat the effects of SARS-CoV-2, as well as for the purposes of the special equivalence surcharge regime (recargo de equivalencia del 0 per cent), provided for in the seventh final provision of Royal Decree-Law 35/2020, of 22 December, is extended until 30 June 2023.These are the in vitro diagnostic medical devices for SARS-CoV-2, SARS-CoV-2 vaccines authorised by the European Commission and related transport, storage and distribution services.

Electricity

With effect from 1 July 2022 and valid until 31 December 2023, the VAT rate of 5 per cent will be applied to deliveries, imports and intra-Community acquisitions of electrical energy made in favour of:

  1. Holders of electricity supply contracts, whose contracted power (fixed power term) is less than or equal to 10 kW, regardless of the voltage level of the supply and the type of contract, when the arithmetic average price of the daily market corresponding to the last calendar month prior to the last day of the billing period has exceeded 45 €/MWh.
  2. Holders of electricity supply contracts who are recipients of the bono social de electricidad and are recognised as severely vulnerable or severely vulnerable at risk of social exclusion, in accordance with the provisions of Royal Decree 897/2017, of 6 October, which regulates the figure of the vulnerable consumer, the bono social and other protection measures for domestic electricity consumers.

Food

With effect from 1 January 2023 and valid until 30 June 2023:

  1. The VAT rate of 5 per cent will be applied to supplies, imports and intra-Community acquisitions of the following products:
    1. The olive and seed oils.
    2. The pasta.

    The rate of the equivalence surcharge applicable to these transactions shall be 0.625 per cent.However, the applicable tax rate will be 10 per cent as of 1 May 2023 if the year-on-year rate of core inflation for March, published in April, is less than 5.5 per cent.In this case, the rate of the equivalence surcharge applicable to these transactions will be 1.4 per cent.

  2. The VAT rate of 0 per cent will be applied to supplies, imports and intra-Community acquisitions of the following products:
    1. The website pan común, as well as frozen pan común dough and frozen pan común bread intended exclusively for the production of pan común bread.
    2. The baking flours.
    3. The following types of milk produced by any animal species:natural, certified, pasteurised, concentrated, skimmed, sterilised, UHT, evaporated and powdered.
    4. The cheeses.
    5. The eggs.
    6. 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 transactions shall be 0 per cent.

    However, the applicable tax rate will be 4 per cent as of 1 May 2023, if the year-on-year rate of core inflation for March, published in April, is below 5.5 per cent.In this case, the rate of the equivalence surcharge applicable to these transactions will be 0.5 per cent.

 

Source Agencia Tributaria

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