Law no. 13/2020 of 7 May 2020, which entered into force today, establishes the following temporary VAT measures: 

1) VAT exemption applicable to domestic supplies and intra-EU acquisitions of goods necessary to combat COVID-19 outbreak;

2) reduced VAT rate to imports, domestic supplies and intra-EU acquisitions of respiratory protection masks and sanitizer gel.

This Law establishes that the tax exemption referred in 1) only applies to domestic supplies and intra-EU acquisitions of the goods included in its annex (namely, face masks, gloves, protective suits, waterproof coats and respirators for intensive and sub-intensive care) provided that they are made for one of the following purposes:

• free distribution to people affected by the outbreak of COVID-19, exposed to that risk, as well as to people participating in the fight against COVID-19;
• treatment of people affected by the outbreak or on its prevention.

Additionally, it is established that this exemption – which grants the right of input VAT deduction – only operates when the acquiring entity is i) the State, autonomous regions or local authorities (as well as any of its bodies), ii) health unit which is part of the National Health Service, iii) other private or social sector health unit included in the national plan of the National Health Service to combat COVID-19 or iv) an entity with charitable or philanthropic purposes.

Although this measure only comes into force today (8 May 2020), it applies to domestic supplies and intra-EU acquisitions of goods made from 30 January 2020 to 31 July 2020.

The present Law also establishes the application of the reduced VAT rate (6% in the mainland) to imports, domestic supplies and intra-EU acquisitions of respiratory protection masks and sanitiser gel carried out in the period between 8 May 2020 (date of entry into force of the law) and 31 December 2020 (date of its termination).