Spanish government to reduce sales tax on face masks from 21% to 4%

Spain will reduce the rate of sales tax on face masks from 21% to 4%, said the government on Wednesday.

Finance Minister and government spokesperson María Jesús Montero said in Congress yesterday that the Cabinet will approve a decree next week reducing the value added tax (VAT) on these products, which are mandatory in public spaces for everyone aged six and above.

The compulsory use of face masks has been in place for months, as Spain continues to struggle to curb the spread of the coronavirus. On Tuesday, the number of reported single-day fatalities reached 411, a number unseen since the days of the full lockdown in the spring.

“This government will be alert to ensure that the reduction on VAT translates into a lower price for consumers and not into higher margins for businesses,” said Montero.

“I can also announce that we are going to once again reduce the maximum sale price to the public,” she added. In April, the government set the top price for surgical masks at €0.96 per unit.

Several European countries have either reduced or suspended VAT on this product and regulated its price. Face masks are taxed at 6% in Portugal, 5.5% in France, and 5% in Germany. In Italy, Belgium and the Netherlands, there is no value-added tax on face masks.

Montero had previously said on several occasions that the government was unable to reduce VAT on face masks because European regulations prohibited such a move, adding that if the European Commission ever authorized it, Spain would make the cut.

On Wednesday, the minister told Congress that written authorization from Brussels came in the day before. Brussels reportedly confirmed that current EU legislation does not allow for VAT modification, but that due to the exceptional situation created by the pandemic, no sanctions will be applied against Spain, just as none have been applied against any other member state.

The EU executive is also working on changes so that coronavirus vaccines and detection tests may also benefit from reduced VAT.

English version by Susana Urra.