B Law & Tax
28 August 2023

Tax advisor: Alava adapts its VAT and excise tax rules to the latest modifications in the common territory

In the Official Gazette of the Historical Territory of Alava of August 7, the regulatory decrees of fiscal urgency 3/2023 and 4/2023, issued by the Government Council on August 1, were published. These decrees modify the Normative Decree 12/1993 on Value Added Tax and the Normative Decree of Fiscal Urgency 1/1999 which regulates Special Taxes. Likewise, the DNUF 4/2023 approves changes in the Normative Decree of Fiscal Urgency 2/2023 of February 14.

The DNUF 3/2023 incorporates in the territory of Alava the measures approved by Law 11/2023 of May 8, related to accessibility of products and services, migration of qualified persons, taxation and digitalization of notary and registry actions. Also, this law amends Law 12/2011 on liability for nuclear or radioactive damage in relation to Value Added Tax and Excise Duties.

In another order of things, the DNUF 4/2023 extends its validity, as it has been done at the national level by means of Royal Decree-Law 5/2023, dated June 28. This Royal Decree establishes and extends certain measures in response to the economic and social repercussions derived from the situation in Ukraine, as well as to support the recovery on the island of La Palma. Within this framework, the application of tax rates in the Value Added Tax is adjusted: 0% is applied to basic food products, and 5% to olive oils, seed oils and pasta, in order to reduce the final cost of these products. However, this application is subject to the evolution of the annual underlying inflation rate.

In relation to VAT, the DNUF 3/2023 establishes requirements for payment service providers, imposing the obligation to keep detailed records of cross-border payments and to provide this data to the tax authority. Regarding Excise Duties, progress is made in the coordination of customs and tax procedures, allowing that, after the export regime, the customs office of exit is a possible destination for the movement under excise duty suspension regime. In addition, the processes related to the movement of excisable products within the European Union for commercial purposes are digitalized and the codes of the combined nomenclature to describe alcohol-derived products are updated. Specifically, the codes for sparkling wine and other sparkling fermented beverages are revised.

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