Royal Decree-Law 5/2023, of June 28, was published in the BOE of June 29, which adopts and extends certain measures in response to the economic and social consequences of the War in Ukraine, to support the reconstruction of the island of La Palma and other situations of vulnerability; transposing European Union directives involving structural modifications of commercial companies, and work-life balance of parents and caregivers; and implementing and complying with European Union law.

Among the tax measures approved, the following stand out:

• In the Value Added Tax, the 0% rate on essential products (bread, milk, fruits and vegetables, eggs, flour and cheese) and 5% on pasta is extended until December 31, 2023. and olive and seed oils. However, the applicable tax rate will be 4% for essential products and 10% for pasta and oils, as of November 1, 2023, in the event that the interannual rate of the underlying inflation for the month of September, published in October, is less than 5.5 percent.
• In the Personal Income Tax, a 15% deduction is created for the purchase of a new electric vehicle. This tax relief extends until December 31, 2024 and its maximum deduction base is established at 20,000 euros.
• The Corporate Tax establishes an early amortization for the installation of battery charging systems for plug-in electric vehicles.

This Royal Decree-Law establishes or extends aid to cover the price of certain energy products for road transport companies and agricultural producers, the management of which is attributed to the State Tax Administration Agency.

For more information, you can consult the full text of the Royal Decree-Law on this page.