Spain puts an end to tax reductions in VAT on basic foods that had been implemented as an extraordinary measure to address rising prices. In 2025, pre-inflation tax rates return and, consequently, the prices of daily consumption products will be adjusted.
In January 2023, the Government approved the temporary reduction in VAT as a measure of the anti-crisis package to cushion the impact of the price increase – derived from inflation and the energy crisis – on the pockets of families. The reduction altered the prices of essential foods such as bread, milk, eggs, fruits, vegetables and greens. All of them went from paying a super-reduced 4% VAT to being temporarily exempt from it. Pasta or oil also reduced their rate from 10% to 5%.
Now, after two years of application, the Government has decided not to extend the discounts. These are changes in food.
Products that recover the super-reduced VAT of 4%
- The bread
- Bread flours
- Milk, whether animal or vegetable
- Cheese and eggs
- Fruits, vegetables, legumes, tubers and cereals
We will probably see a slight increase in the final price of these foods in the supermarket, by recovering that 4% VAT after being exempt.
Products that recover the reduced VAT of 10%
- The pasta
- Oils, including olive oil
In both cases, it is foreseeable that consumers will face a more notable price increase, since the applicable rate will go from 5% to 10%.
We enter 2025 with a chain of three consecutive months of increases in the CPI, which reaches its highest value since July. In December it rose four tenths and closed the year at 2.8%, according to data released this Monday by the National Institute of Statistics (INE). The organization explains that the rise is due to the increase in fuel prices and, to a lesser extent, to the prices of leisure and culture, which in December increased more than in the same month of the previous year.
However, the price of oil fell by 3.7% in November, its first decline since March 2021. This has been one of the most uncontrolled products in recent yearswith increases of up to more than 70% in 2023. Now, it could become more expensive again by recovering VAT. It will also be more noticeable in pasta: by recovering 10% of VAT, a one-euro package of pasta will cost approximately 1.10 euros again.
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