Top court ruling slashes IVA sales tax on gluten-free and speciality breads in Spain

Spain's Ministry of Finance has lowered the IVA sales tax on speciality breads, including gluten-free bread, from 10 to four per cent following a Supreme Court ruling that this super-reduced IVA rate should be applied so that they are the same as 'normal' bread, which already enjoys this lower tax.

This is stated in the resolution of 24 February of the Directorate General of Taxes on the IVA rate applicable to bread, published on Thursday 27 February in Spain's Official State Bulletin (BOE) and reported by Europa Press.

The reduced rate of four per cent will be applicable to products which "have been made with gluten-free flour, either naturally or because it has undergone a special treatment to reduce its gluten content, or in which flour has been replaced by other naturally gluten-free ingredients, even if these are the majority of the ingredients".

Plain bread is bread made with flour, water, yeast or sourdough and salt and is subject to IVA at four per cent, while speciality bread is bread that contains more ingredients and can be made in a different way and cooked in different ways. This category of special breads includes multigrain, baguette, ciabatta, toasted bread, breadsticks, biscotti, sliced bread or breadcrumbs and also gluten-free bread, which until now were taxed at 10 per cent and will now also be taxed at four per cent.

The Supreme Court ruling of last October establishes that the current wording of the IVA Law "opposes the principle of neutrality", according to which the difference between tax rates must take into account the average consumer's perspective on these products.

Sources from the Ministry of Finance told Europa Press that the super-reduced rate for special breads has been in force since the publication of the Supreme Court ruling last October and that the resolution published on Thursday in the Official State Bulletin is to provide legal certainty to operators.

The Spanish association of bakery, Viennese pastry and confectionery industries (Asemac) has welcomed the decision by the Ministry of Finance.