Lowering The Veterinary VAT Will be Approved, And Then Applied?
The PGE 2019 contemplates a reduction of the veterinary VAT
But contrary to what has been published in some media, the reduction of veterinary VAT is not approved.
This comes from old, in fact in 2017 the Congress approved a Proposition No of Law to lower the veterinary VAT, which never came to be applied. Now this reduction has been included in the General State Budgets.
What do the PGEs say about this?
We reproduce literally:
14.6 Value Added Tax.
• Application of the reduced VAT rate for products of
feminine hygiene, which will go from 10% to 4%.
• Likewise, the VAT tax rate of the
veterinary services at the reduced rate of 10%.
¿What is the reduction of the veterinary VAT?
The reduction of the proposed veterinary VAT is 21% current (general rate) to 10% (reduced rate), which will mean if the PGE finally approve some 35 million euros less revenue for the Treasury … Or otherwise seen 35 million of euros of savings if the veterinary clinics apply it.
What the Law says about the VAT rates that should be applied
The super-reduced VAT rate of 4% Applies to articles that are considered to be First need. These are basic foods of the shopping cart (milk, bread, etc.), books (except the electronic book), medicines for human use, press (newspapers and magazines), prostheses, internal implants, orthoses and vehicles for people with disabilities.
The reduced VAT rate of 10% applies to food products and goods for agricultural, forestry or livestock use, medicines for veterinary use, water, pharmaceutical products for consumer use, purchase of homes and garages, rehabilitation and renovation of housing, flowers and plants, passenger transport services, amateur sports services, social assistance, trade fairs and exhibitions, among others .
The general VAT rate of 21% it applies to all those goods and services that do not fall into the two previous categories and that are not exempt from VAT either.
Will the veterinary VAT reduction be approved this time?
The road is not simple:
If Brussels gives its approval to the PGE, the PGE will be presented at the Congress of Deputies, where the different political groups will admit or reject them. You can admit to reject or make partial amendments. Finally the PGE would go to the Senate (with PP majority). Finally, they would be published in the Official State Gazette with the rank of Ordinary Law.
And if the downgrade is approved, will it be applied?
Well, the safest thing is not. And as it shows what has happened with the VAT drop in the cinema this year. This decrease is about 50 million euros a year, which now, in most cases, have been theaters, without impacting the end user (the viewer). The calculations ensure that only one third of movie theaters have applied the VAT drop.