Indirect Taxes
Value Added Tax (VAT)
The 2023 State Budget Law introduces specific amendments to the VAT Code. If postpones the filing of VAT returns concerning the month of June and concerning the second semester from 20 August to 20 September. Payment of any VAT regarding those returns is postponed to 25 September.
The special exemption regime foreseen in Article 53 of the VAT Code is capped at EUR 13,500 in 2023.
Reduced rates
Reduced rates apply to beverages and yogurt with cereals, vegetables, vegetable products, among other, butter and vegetable margarines, canned fish (with a fish component of more than 50%), the acquisition of motorcycles, and construction work carried out by the responsible entities within the scope of the social housing policy in the Autonomous Regions.
List I enclosed to the VAT Code now includes the taxation of the supply and installation of space heaters and biomass boilers, included in the two highest energy classes. The reduced rate also applies to the access of live broadcast of shows and events in theaters, among others.
Said amendments have entered into force on 1 January. In the case of the supply and installation of space heaters and biomass boilers, as well as the access of live broadcast of shows and events in theaters, the amendments shall apply until 30 June 2025.
The Government is granted authorisation to carry out budget changes resulting from the transfer of an amount equivalent to the VAT actually borne within the scope of projects financed exclusively by the Recovery and Resilience Plan, either through grants or loans, exclusively within the scope PRR, carried out by certain entities (central and local government administration, non-profit entities, higher education institutions, labor unions, business and employers’ associations, among other).
“Reduced VAT rate for heating boilers and biomass heaters and a 4% general increase of Excise Duties.”
Circulation Tax (IUC)
General increase of about 4%.
The additional IUC remains in force.
Tax on Vehicles (ISV)
There is a general increase of about 4% of the tax rates, both on the environmental and engine capacity components.
Indirect Taxes
Tax on oil and energy products (ISP)
The partial refund mechanism for professional diesel is now extended to professional gas, as well as to public passenger transportation companies.
The refund is no longer processed in relation to each supply, now operating on a monthly basis.
The tax rates for various products (fuel oil, gas, diesel, etc.) used in the production of electricity, electricity and heat (cogeneration) and city gas are increased, both in terms of ISP, and in terms of CO2 addition. New increases are also foreseen for the following years.
However, in 2023, there will be no partial taxation of natural gas identified by NC 2711 11 00 and 2711 21 00.
“The gradual elimination of exemptions applicable to certain oil and energetic products progresses.”
Tax on alcoholic beverages and non-alcoholic beverages with added sugar (IABA)
Beer
The computation of excise duties on beer with low alcoholic contents was amended. Beers with alcoholic content above 3.5% it is expected an increase of taxation of around 4%. Beers with a lower alcohol content, ranging from 1.4% to 3.5%, there is a reduction of taxation.
Non-alcoholic drinks with added sugar
General increase of taxation of about 4%.
This increase will also be applied in liquid, powder, granulates or other solid forms of concentrates.
Spirits drinks
General increase of taxation of about 4%.
This increase was also reflected in the rates applicable in the Autonomous Region of Madeira.
Other fermented still and sparkling alcoholic beverages
General increase of taxation of about 4%.
Tobacco
General increase of taxation of about 4%.
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