The Council of Ministers has approved the Royal Decree-Law for the extension of certain measures in response to the economic and social consequences of the war in Ukraine, to support the reconstruction of the island of La Palma and to other situations of vulnerability, in which several measures that began to be applied in mid-2022 are extended until December 31, 2023 in order to lower the cost of living and reinforce the fight against inflation.
Amongst the extended support packages are a deduction of 15% in personal income tax, staple foods will maintain IVA at 0%, the same will happen with those that were reduced from 10% to 5%, among which are pasta and cooking oils.
The Royal Decree-Law does not include other decisions that already appeared in the one approved at the end of 2022, such as IVA reductions on electricity and gas or the suspension of the Special Tax on electricity, since it is already provided for in the norm that its application would be valid until December 31, 2023.
For this reason, most of the measures contemplated in Royal Decree-Law 20/2022 of December 27 are maintained. Among which are, in addition to IVA discounts on the final price of food or the limitation of the final cost of the butane cylinder, discounts on transport passes from the autonomous communities or aid to carriers.
This package of measures mobilises an additional 3,8 billion euro, including tax reductions, direct aid and bonuses. Therefore, resources of 8,9 billion euro are made available in the second part of the year. In total, more than 47 billion euro have been mobilised to respond to the war in Ukraine and its consequences.
The Royal Decree-Law approved by the Council of Ministers contemplates the extension of the limitation of the maximum sale price of bottled liquefied petroleum gases. This is the area in which the butane cylinder is contemplated, the maximum price of which was limited in June 2022 at 19.55 euro. This final price for the consumer, which is regulated and reviewed every two months, may not exceed that figure. At present, thanks to the relaxation of international markets, the bottle costs 15.96.
With this new extension, and since the beginning of the energy price crisis in 2021, the Government has applied energy tax reductions for a total value of 21,5 billion euro: 11,2 until the end of 2022, and 10,2 by 2023. Some measures aimed at lowering household bills and which have helped make Spain the leading country in reducing inflation in Europe.
As a complement to these advantages for the purchase of electric vehicles, the installation of charging points for these cars is promoted with similar measures. Individuals will be able to access a 15% deduction in personal income tax if they install these plug-in points to recharge the battery in a property they own. The requirement is to do it before December 31, 2024 and that this system is not linked to an economic activity.
The Royal-Decree-law includes a deduction of 15% in Personal Income Tax (IRPF) for the purchase of a new electric vehicle. This reduction, which is now in force, will be extended until December 31, 2024. This measure will be susceptible to being extended to December 2025 when the addendum to the Recovery Plan that the Council of Ministers approved earlier this year is approved.
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