Spanish government will zero VAT on olive oil from July 1

Published Jun 21, 2024

Tridge summary

Spain's Prime Ministry has announced that olive oil will be considered a basic need food product from July 1, meaning it will no longer be charged VAT. The government has reduced the VAT rate on olive oil from 10% to 5%, and then to 0%, and the 4% VAT rate will be transferred to the consumer after the practice is abolished. This decision, part of the government's strategy to increase citizens' purchasing power amidst high inflation, is expected to cost the government over 1.6 billion euros in 2023. The government has also decided to extend the practice of not charging VAT on basic food products, which was scheduled to end on June 30.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

According to Prime Ministry sources, as reported in the Spanish press, the practice of not charging VAT on foods that are considered basic needs such as bread, eggs, fruits or vegetables in Spain for the last 1.5 years will also be valid for olive oil as of July 1. In the decision taken at the beginning of 2023, the government reduced the VAT rate on olive oil, which was 10 percent under normal conditions, to 5 percent. Following the decision of the Council of Ministers on June 25, the VAT rate will be zero as of July 1, and since olive oil is now defined as a basic food product, it is stated that the 4 percent VAT rate will be transferred after this practice is abolished. According to the data of the Spanish National Institute of Statistics (INE), olive oil, which has recorded a price increase of 204.8 percent since January 2021, is sold for an average of 10-12 euros per liter under normal conditions. On the other hand, Prime Minister Pedro Sanchez announced that the practice of ...

Source: Haber7