The claim made by the Spanish Government last weekend that the EU would not let it lower the IVA on masks caused surprise in Brussels and provoked a response.

The EU announced that it had no intention of imposing sanctions on member states that lowered their Value Added Tax.

Consequently, the Ministra de Hacienda, María Jesús Montero, announced after being questioned on the subject at a press call that the Government was now studying a reduction on the tax levied on obligatory masks or on the maximum price permitted in order to make them “more affordable.”

The EU norms on IVA includes a section for pharmaceutical products that only bear the ‘super-reduced’ IVA of 4%, but, surgical masks are not included in it, points out the Minister.

The EU stated in 2016 that there would be no sanctions placed on member states who apply IVA rate contrary to those stipulated in the norms, providing that there is a EU draft bill in the pipelines that will alter the standing one on IVA.

This is the case here because the European Commission suggested a reform bill in April 2016 giving greater flexibility to member states to fix IVA rates. As this draft bill has to be approved by all member states it is still awaiting unanimous approval.

In fact, the EC Spokesperson has emphasised the point that this law reform will permit member states to place zero IVA on health products.

Editorial comment: expect the Government to finally reduce the IVA on masks just as soon as they no longer become necessary, thus, obligatory.

(News: Spain)