Enclosed please find the Royal Decree No 592 on the reduction of VAT rate. Please note that the VAT rate stated in the Royal Decree does not include the municipal tax of 10% of VAT which will be in addition to the VAT.
The VAT rate will be as follows:
• From 1 October 2015 to 30 September 2016 the VAT rate will be 7% (6.3% Royal Decree rate + 0.63% - Municipal tax 10% of VAT rate)
• From 1 October 2016 onwards the VAT rate will be 10% (9% Royal Decree rate + 0.9% - Municipal tax 10% of VAT rate)
Please also note that the VAT rate may be reduced to 7% for 1 October 2016 to 30 September 2017 depending on the government policy.
Should you have any further questions, please do not hesitate to contact us.
Best regards,