VAT on basic food products will increase next Tuesday, October 1, once This Monday ends the extension of the exemption from this tax which the Council of Ministers approved last June for the essential products of the basket and to which olive oil was also added.
From Tuesday, VAT on milk, bread, flour, fruits, vegetables, legumes, cereals, tubers, cheeses and eggs will temporarily increase to 2% until December 31. Furthermore, Pastes and seed oils for which VAT was reduced to 5% with the extension will bring it to 7.5% until the end of the year.
This is a gradual return to normal rates demanded by the European Commission, so that Member States gradually ease the extraordinary measures adopted in recent years to confront the conflicts in Ukraine and the Middle East.
On January 1, 2025, Basic foods will return to 4% VAT before the exceptional measures, while pastes and seed oils will return to 10%.
Regarding VAT on olive oil, the Government has committed to also permanently including it in basic foods for the purposes of tax treatment, so that from January 1, 2025, it will be taxed at the super reduced rate of 4%.
According to calculations by the Association of Manufacturers and Distributors (Aecoc) based on a PwC report, food inflation will increase by around one point with the farewell to reduced VAT.
