Spain: Tax measures in new laws approved at end of 2023

Royal Decree-Law 8/2023—which became effective on 29 December 2023 (with some exceptions)—includes the following tax measures:

• Temporary extension of reduced rates of value added tax (VAT) for basic food products (0%) and for olive and seed oils and pasta (5%)
• VAT rate of 10% (instead of current 5%) on deliveries of electricity (until 31 December 2024) and natural gas (until 31 March 2024) and on pellets, briquettes, firewood, and other ecological substitutes of natural gas from biomass and intended for heating systems (until 30 June 2024)
• Increase in rate of the special tax on electricity (IEE) to 2.5% and 3.8% during the first and second quarters of 2024, respectively (from 0.5% applicable until 31 December 2023)
• Gradual recovery of the tax on the value of production of electrical energy (IVPEE)
• Tax on tax extended to 2024 individual (personal) income tax (IRPF) deduction for energy efficiency improvement works in homes and to the tax on companies (IS) freedom of amortization in investments that use energy from renewable sources
• Extension for 2024 of the temporary energy and tax liens bank and the temporary tax of solidarity of the great fortunes (ITSGF)
• Approval of 2024 tax coefficients for the increase in the value of urban nature lands (IIVTNU) (commonly known as “municipal goodwill”)
• Amendments to the regulations on individual (personal) income tax, wealth tax (IP) and ITSGF to establish that such taxes may be collected by electronic means

In addition, Royal Decree 1171/2023, which was published on 28 December 2023, includes amendments to various tax regulations.

Read a January 2024 report (Spanish) [PDF 626 KB] prepared by the KPMG member firm in Spain