Super-reduced VAT – What is it, definition and concept | 2022

The super-reduced Value Added Tax (VAT) is the lowest VAT tax rate there is. This type of VAT is applied to certain products categorized as essential.

The Value Added Tax has different tax rates depending on the good or service on which it is applied. Within these types is the super-reduced VAT, which has the lowest tax rate and taxes what are known as basic products.

In the case of Spain, VAT has three brackets. The first of these is the general VAT, which has the highest tax rate and is levied on most products. Some example of them can be a computer or a car.

Secondly, there is the reduced VAT that is applied to products such as hotels, transport or food. In third place, we find the super-reduced VAT that is levied on products such as bread, milk or books.

Finally, note that there are also some products that are exempt from VAT. There are very few cases, but, for example, the tax is not applied to the main medical services.

What is VAT?

VAT is a tax levied on the consumption of all types of goods and services, with some exceptions. It is a tax with great weight in the collection of the States, since it is present in the majority of transactions.

It is an indirect tax, so the same rate is paid by all citizens, regardless of their income level. Therefore, a person with an income of one million dollars per month will pay the same percentage of tax as a person with a salary of one thousand dollars per month.

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In most countries of the European Union (EU), VAT is divided into brackets depending on the type of product on which it is applied. Tax rates vary depending on each country.

For all those EU countries, in addition, limits are established for the tax rate. In this way, it is ensured that all territories have similar tax rates.

Examples of super-reduced VAT.

Below, we give you some examples of products on which the super-reduced VAT is applied. There are few cases, since this type of VAT is stipulated only for essential products or those that are necessary for the buyer.

  • Feeding: Those foods considered basic such as cereals, fruit, eggs, some dairy or bread are taxed with this tax rate.
  • Culture: Some products related to culture are also taxed with super-reduced VAT. These are, for example, books, newspapers, magazines or school books.
  • Medicines: Medicines, being considered necessary, also have the lowest tax rate. It should be noted that not all pharmacy products are subject to this type of VAT, only those considered medicines.
  • Aid for people with disabilities: People who have been recognized as having a disability have the option, on certain products, of having the super-reduced VAT applied to them instead of the general one. This is a help for all those people who suffer from a problem of this type.

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