Are you aware of the latest
VAT rate changes in the EU ?
Since 1 January 2023, new VAT changes have come into effect in certain EU countries.
The final version of the Italian budget law has been approved on 29/12/2022 and that some VAT rates have been reduced.
Indeed, the 5% VAT rate has been introduced for:
powdered or liquid milk for feeding infants or young children, packaged for retail sale,
► Food preparations of flour, groats, meal, starch or malt extract for feeding infants or young children, put up for retail sale (Custom code 1901.10.00),
► Baby diapers,
► Child seats to be installed in motor vehicles,
► Absorbent and tampon products, intended for the protection of feminine hygiene, other than those that are compostable according to the UNI EN 13432:2002 standard and those that are washable.
The Spanish government has urgently passed the Royal-Decree 20/2022 on December 27, 2022 temporarily reducing the VAT rate of certain products, from January 1, 2023 until June 30, 2023.
Below the list of the products concerned by these VAT reductions :
► Olive and seed oils, and pasta, will be charged at 5%, instead of 10%,
► The following products will be charged at 0% instead of 4%:
- Common bread, as well as frozen common bread dough and frozen common bread intended exclusively for making common bread, and bread flours,
- The following types of milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered,
- Cheeses and eggs,
- Fruits, vegetables, legumes, tubers and cereals, which have the status of natural products in accordance with the Food Code.
Note that the applicable tax rates will be 10% and 4%, respectively, as of May 1, 2023, if the interannual rate of underlying inflation for the month of March, published in April, is less than 5,5%.
The Budget Law 31/2022 of December 23, has also reduced the tax rate for feminine hygiene products, condoms and other non-medicinal contraceptives to 4%.
From January 1, 2023 to December 31, 2023, there is a temporary Luxembourg will see its VAT rates reduced by 1%.
This means that :
► The standard rate of 17% drops to 16%,
► The intermediate rate of 14% drops to 13%,
► The reduced rate of 8% drops to 7%.
The French finance law for 2023, voted on January 4, will extend the reduced 5.5% VAT rate on certain agricultural products.
The new text reduces VAT rates from 10% to 5.5% on the following related products (in mainland France* ):
► Food products intended for consumption by animals producing themselves food products intended for human consumption, products normally intended to use in the preparation of these food products and products normally used to supplement or replace these food products,
► Products of agricultural, fisheries, fish or poultry origin when they are normally intended for use in agricultural production.
These products will now be subject to the same rate as products intended for human consumption, in order to rationalise the application of the reduced rate in the agri-food sector.
* These rates are applicable in mainland France but not applicable in Corsica or in the overseas departments such as Guadeloupe, Martinique, La Réunion etc.
In Poland, legal acts concerning certain reduced VAT rates on goods and services, have recently been announced for 2023.
Therefore, since December 31st ,2022, the following reduced VAT rates no longer apply :
► 8% VAT rate for the supply of motor petrol, diesel, biocomponents, LNG and LPG.
► 5% VAT rate for the supply of heat and electricity
► 0% VAT rate for the supply of natural gas.
Since January, 1st 2023, the above supplies are back to being subject to the standard VAT rate of 23%.
However, the Polish Ministry of Finance confirmed on December,2nd,2022, that the following reduced VAT rates will continue to be applicable in 2023 :
► 0% VAT rate until 30th June 2023 : Free of charge supply of goods or services for the purpose of assistance to victims of the war in Ukraine through Governmental Agency for Strategic Reserves, health care institutions and local government units,
► 0% VAT rate until 31st December 2023 : Foodstuffs listed in Annex 10 to the VAT Act under items 1-18, other than those classified as catering services, e.g. fish, dairy products, meat, vegetables and fruits, bread, oils, etc,
► 0% VAT rate until 31st December 2023 : Goods subject to services on tangible movable property before shipment to other EU member states,
► 8% VAT rate until 31st December 2024 : Soil conditioners, growth promoters and substrates for cultivation (with exclusion of mineral substrates and potting soil), microbial fertilizers.