The latest developments in Value Added Tax legislation are described below.
1. 2025 Tax Rates:
- A 4% VAT rate applies to the following food products: bread; breadmaking flours; natural, certified, pasteurised, concentrated, skimmed, sterilised, UHT, evaporated, powdered and fermented (*) milk; cheese; eggs; fruit; vegetables and greens; legumes; tubers; cereals that are natural products according to the Food Code; olive oils.
- A 10% VAT rate applies to transactions involving seed oils and pasta.
- A 21% VAT rate applies to the supply of electricity.
(*) Effective from 22 December 2024
2. Anti-fraud Measures for Tax Warehouses of Petrol, Diesel, or Biofuels:
- Finalisation of the non-customs warehouse regime
This amendment establishes that, in the case of petrol, diesel and biofuels intended for use as fuel, the non-customs warehouse regime will be considered finalised when the product is withdrawn from the tax warehouse. This withdrawal is always attributed to the last depositor of the product, who is obliged to pay the corresponding Hydrocarbon Tax and to settle VAT on a transaction equivalent to an import. If the tax warehouse holder is also the owner of the product, he or she is responsible for fulfilling these tax obligations.
In addition, the last depositor of the withdrawn product, or the tax warehouse holder must guarantee the payment of VAT on subsequent taxable and non-exempt deliveries of goods withdrawn from the tax warehouse.
- Guarantee to ensure VAT payment
The last depositor of petrol, diesel and biofuels to be used as fuel and withdrawn from the tax warehouse, or the tax warehouse holder if he is the product owner, must establish and maintain a guarantee (a bank guarantee or an advance payment) to ensure the payment of VAT on subsequent taxable and non-exempt deliveries of these goods.
The guarantee requirement will not apply if the last depositor or, where applicable, the tax warehouse holder, has a recognised status as an Authorised Economic Operator or a Trusted Operator.
A transitional regime is also provided for.
- Monthly tax period
Holders of tax warehouses for petrol, diesel and biofuels, as well as the persons withdrawing these products from the tax warehouse, are now required to account for VAT on a monthly basis.
