07.18.23

Reduced VAT extension on food products

Ongoing inflation is prompting countries to deploy new fiscal strategies- or extend current ones. Our recent posts have captured Spain’s fluctuating VAT rates targeting specific niche sectors as it endeavours to restore some stability to its wider economy.  

Much in the same way as Poland this month, Spain has opted to extend the zero VAT rate on certain food products until 31 December 2023, therefore extending the measures outlined in Royal Decree-Law 20/2022, which were initially expected to last until 30 June 2023. Specific other reductions on pasta and seed oils from 10% to 5% will also continue until the end of the year. However, unlike Poland, Spain has caveated that the extension will only apply if inflation is below 5.5%, indicating that fiscal policies are intrinsically linked to wider economic concerns- with inflation currently at the forefront of many EU Member States’ concerns.  

It is currently expected that Spain’s previous 4% VAT rate for specific food products will be reinstated on 1 January 2024, alongside subsiding inflation.  

Spain is a compliant territory for Kofax and we support all valid VAT rates in the country as part of our e-invoicing solution today.