Spanish Government Increases IVA from 1 September 2012

As from 1 September 2012, other than transport, tourism and foods which will increase from 8% to 10%, the remaining products that once benefitted from a reduced tax rate, like cinema, dental services, funeral services and hairdressing, will increase 13 points.

 The remaining goods and services, which until now took advantage of a reduced tax of 8%, are to rise 13 points and will now be taxed at 21% – the new general tax band.

 Cinemas, theatres, circuses, funeral parlours, health and dental services, hairdressers and florists, in addition to many more, will now increase from 8% to 21%.  The lower band of 4% for primary needs, not including first time home purchases, which will increase from 4% to 10% in 2013 and the deduction of IRPF (Personal Income Tax) for property purchase will cease in 2013.

 The Chancellor of the Exchequer and Public Works Minister finally confirmed on 13 July 2012 that the IVA tax increases would be made effect from 1 September 2012. 

 IVA will increase as follows

 Remaining at 4%

–        Milk, Bread, Eggs, Cereals, Vegetables, Fruit, Books, Albums, Sheet Music, Maps and Drawing Books, except electronic devices, Press and Magazines

 Increased from 4% to 10%

–        New build property purchase and the rental with option to buy (as from 2013).  The second hand property will be taxed via the Transmission Tax (ITP)

 Increased from 8% to 10%

–        Transport, Food Shopping Basket except those basic products already listed, Prescription Glasses, Lenses, Hotels and Restaurants, Reform and repair building work to property until the end of 2013 (when this will increase also to 21%).  The redevelopment will lose fiscal support, Trade Shows and Exhibitions

 Increased from 8% to 21%

–        Mixed services of Hotel Trade, Entertainment, Discotheques, Party Halls, Barbeques, Ornamental Flowers and Plants, Theatre, Circus and Bull Fighting Entrance Tickets, Digital TV Services, Funeral Services, Hairdressing Services, Artwork Purchases, Artist Services, Healthcare, Dental Care and Thermal Spa Cures, Amateur Sporting Events, Radio Broadcasting, Building Works, Artwork Imports, Antiques and Collection Pieces, Services to Athletes, Building and Repair Work

 Increased from 18% to 21% (Remainder of goods and services)

–        Products of intimate hygiene, Nappies, Alcohol, Tobacco, Electronic Books

 Should you  have any queries, please do not hesitate to contact us.

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