Skip links

Spain food 0% VAT until 30 Jun 2024

Temporary zero-rating on basic foods to be extended until 30 June 2024

The temporary zero-rating of bread, flour, certain types of milk, cheeses, eggs, and fruits, vegetables, legumes, tubers, and cereals is to continue beyond the scheduled 31 December 2023.  On 27 December 2023, the Council of Ministers approved a Royal Decree for a further extension of the VAT subsidy for food for a further six months.

The short-term cut was first introduced in January 2023.

VAT on natural gas rises to 10% until March 2024

The Spanish government’s cut to the Value Added Tax rate on domestic natural gas from 21% to 5% since October 2022 has ended. The rate will now move to 10% between 1 January and 31 March 2024.

Sign-up for our free VAT newsletter for global updates

Domestic electricity rises to 10% for 2024

The subsidised 5% VAT rate on electricity which applied between June 2021 and Dec 2023, rises to 10% until 31 December 2024. This applies to only certain customers:

  • Consumers on low-incomes and welfare support
  • Supplies to households and small businesses based on a price ceiling of €45 per MWh in the marketplace.

The measure was first introduced in June until 31 December 2021. It was then first extended to April 2022.

Other European electricity VAT cuts have now been widely copied.

The government has also suspended the electricity industry 7% tax, IVPEE, levied on producers for July, August and September. IVPEE tends to be passed on directly to the end consumers

European Commission derogation from reduced VAT rate rules granted

In setting the 10% rate, Spain was varying from the rules on reduced VAT rates contained within the EU VAT Directive. It sought initial permission for the second half of 2021. It has now applied for permission to extend the measure for the first four months of 2022.

Article 98 of the VAT Directive establishes that Member States may apply either one or two reduced rates. Reduced rates can only be applicable to the supply of goods and services in the categories described in the Annex III of the Directive. Nevertheless, Article 102 of the VAT Directive establishes that, after consultation of the VAT Committee, each Member State may apply a reduced rate to the supply of natural gas, electricity, or district heating.

Check VAT Calc’s global VAT and GST rates via our global rate database.


Get our latest news right in your mailbox