Spain has removed tax on olive oil up until September.
The Spanish administration temporarily waives VAT on olive oil due to price surge. From July to September, zero VAT will be applied, as announced by the government. Starting October, a two percent VAT will be implemented on the sale of olive oil, gradually increasing to four percent, similar to other basic foodstuffs.
Finance Minister María Jesús Montero explained that this action underscores "the importance of olive oil in the Mediterranean diet and a healthy lifestyle."
Spain takes the crown as the top olive oil producer and exporter globally. In their culinary traditions, it's used extensively - from cooking, garnishing sandwiches, salads, veggies, and various dishes. According to the Agriculture Ministry, the average Spanish household consumed approximately 6 liters per person last year, in contrast to 0.4 liters internationally.
However, prices have skyrocketed lately, not only due to inflation but also a result of a prolonged drought that lowers production. As per the Agriculture Ministry, the price of olive oil in Spain has jumped by a staggering 272 percent compared to September 2020.
In regular grocery stores, a 5-liter bottle can set you back over 50 euros, forcing some to opt for less expensive cooking oils. To address this, the government had already decreased the VAT on olive oil from 10 to 5 percent.
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- As the leader in olive oil production and export, Spain's decision to temporarily waive value added tax on olive oil from July to September is expected to significantly benefit local olive oil producers.
- Due to the surge in prices, Spain, being both a prominent producer and exporter of olive oil, is now increasingly looked to as a potential exporter of value-added olive oil, given the September 2021 announcement of lower VAT rates.
- In recognition of its role as a global value added tax (VAT) exempt olive oil exporter during the summer months, Spain aims to preserve its leadership position in olive oil production and consumption into September and beyond, enabling smart choices for consumers and sustainable agricultural growth.
