Update in relation to an announcement issued by the Tax Department on 3/5/2023
In a meeting that took place on 2/5/2023, the Council of Ministers approved a Decree based on which the VAT Act is amended, for the zero rate to be imposed on supplies of certain basic consumer goods as follows:
The zero VAT rate will apply to the following items:
Bread: All types of bread, fresh or frozen, with or without yeast, such as: white, black, whole meal, multi-seeded, village style, corn, baguette, ciabatta, slide bread, bread rolls, pittas. Pastries, rusks, and any bread with added ingredients such as raisins, nuts, herbs are not included.
Milk: fresh milk (e.g., cow, goat, sheep), sweetened, concentrated, long-lasting, flavoured milk (e.g., chocolate, banana), vegetable milk (e.g., almond, soy, rice).
Eggs: It is not specified whether it includes other eggs besides chicken eggs, e.g., quail
Baby food: powdered, dry and/or wet form, intended for consumption by children. Snacks (e.g., chips, nuts, sweets, chocolates, ice cream) are not included.
Baby diapers: Of all kinds
Products for feminine hygienic protection (tampons, sanitary towels, and incontinence pads).
Adult diapers: Of all kinds
It is also noted:
(a) Although in each category some examples of items that are or are not included in the zero rate are given, it is expected that many inquiries will arise from either supermarkets or wholesalers trading in one of the above categories. In such cases, we advise you to contact. the Tax Department for clarification.
(b) Any trader involved in the supply of the above items should carry out a stock count to prevent the transfer of the supplies to a time after the zero rate applies.
(c) The inclusion of the above items in the zero rate will be valid until 31 October 2023, when they will revert to the previously applicable rate.
(d) For the above decree to be valid it must be published in the Official Gazette of the Republic. It is expected that the publication will take place on Friday 5/5/2023, otherwise, complications may arise for both traders and consumers.
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