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Practical Handbook VAT 2021

Tax rates

Sweetened beverages

With effect from 1 January 2021, the tax rate applicable to beverages containing added sweeteners, both natural sweeteners and sweetening additives, will be modified and taxed at the general rate of 21 percent, a measure that constitutes a social commitment to rationalise and promote responsible consumption, particularly among children and young people.

Zero percent rate

From 23 April 2020 until 31 December 2021, the 0 per cent rate will apply to domestic deliveries, imports and intra-Community acquisitions of medical equipment to combat the pandemic caused by COVID-19 with the following requirements:

  1. The goods to which the 0 per cent rate will be applied are the following:

    • For the period from 23 April to 31 October 2020, those listed in the annex to Royal Decree Law 28/2020 of 22 September.

    • For the period from 1 November 2020 to 30 April 2021, those listed in the annex to Royal Decree Law 34/2020 of 17 November.

    • For the period from 1 May 2021 to 31 December 2021, those listed in the annex to Royal Decree Law 7/2021 of 27 April.

  2. The 0 percent rate will be applied whenever the recipients are public law entities, clinics or hospitals, or private entities of a social nature as referred to in Article 20.3 of the LIVA.

Four percent rate

Article 7 of RD-Law 34/2020, with effect from 19 November 2020 and until 31 December 2021, temporarily reduces the rate applicable to the supply, import and intra-Community acquisition of disposable surgical masks for recipients other than public law entities, clinics or hospitals, or private social entities referred to in paragraph three of Article 20 of the VAT Law, from 21 to 4 per cent.

Reduction of the rate of VAT to 10 percent on electricity supplies.

With effect from 26 June until 31 December 2021, for electricity contracts whose fixed power term does not exceed 10 kW, a reduction from 21 to 10 percent in the VAT rate applicable to all components of the electricity bill is established, when the average monthly wholesale market price in the month prior to the billing month has exceeded 45 €/MWh.

The VAT rate applicable to the electricity bill of electricity supply contract holders who are recipients of the social voucher and are also recognised as severely vulnerable or severely vulnerable at risk of social exclusion, during the period referred to in the previous paragraph, regardless of the wholesale market price of electricity, is also reduced to 10 percent.