Government studying increase in IVA rates

The Government and the Tax Office are studying the possibility of raising the rates of IVA (VAT) on products and services currently benefiting from reduced rates, such as tourism and foodstuffs, in order to raise more revenue.

Recommendations by Brussels to raise IVA rates are generally seen as ‘binding’ as opposed to ‘optional’.

The normal IVA rate is 18%, with a reduced rate of 8% for foodstuffs, except staple items such as eggs, bread and milk, as well as for items such as contact lenses, spectacles and  cultural and recreational services. Books, newspapers or magazines, purchase of a residence, prosthetics and wheelchairs and staple foods (eggs, bread and milk) currently fall under the super-low 4% rate.

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