Spain extends zero VAT rate on essential food items

In response to rising living costs and to support consumers, the Spanish government has announced the extension of the zero VAT rate on essential food items until September 30, 2024. This measure, enacted by Royal Decree-Law 4/2024 of June 26, 2024, covers products such as bread, flour, milk, cheese, eggs, fruits, vegetables, legumes, tubers, and cereals.

Moreover, as of July 1, 2024, olive oil has been added to the list of products subject to the zero VAT rate. This move aims to further reduce the costs of essential food items and ease household budgets.

From October 1, 2024, to the end of the year, the VAT rate on these essential items will increase to a minimal level of 2%. Subsequently, from January 1, 2025, the original VAT rates will be reinstated.

The Spanish government emphasizes that this temporary tax relief aims not only to provide savings to consumers but also to support economic stability in the country. This decision reflects the authorities’ commitment to mitigating the effects of inflation and other economic factors impacting the daily lives of citizens.

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