Royal Decree-Law 5/2023, of June 28, was published in the BOE of June 29, adopting and extending certain measures in response to the economic and social consequences of the War in Ukraine, supporting the reconstruction of the island of La Palma and other situations of vulnerability; transposing European Union directives involving structural modifications of commercial companies, and work-life balance of parents and caregivers; and implementing and complying with European Union law.

Among the approved tax measures are the following:

• In the Value Added Tax, the 0% rate on basic necessities (bread, milk, fruits and vegetables, eggs, flour and cheeses) and the 5% rate on pasta and olive and seed oils are extended until December 31, 2023. However, the applicable tax rate will be 4% for essential products and 10% for pasta and oils, starting on November 1, 2023, if the annual rate of underlying inflation for the month of September, published in October, is less than 5.5 percent.
• In the Personal Income Tax, a 15% deduction is created for the purchase of a new electric vehicle. This tax relief extends until December 31, 2024 and its maximum deduction base is set at 20,000 euros.
• In the Corporate Tax, an early amortization is established for the installation of battery recharging systems for plug-in electric vehicles.

This Royal Decree-Law establishes or extends aid to cover the price of certain energy products for road transport companies and agricultural producers, the management of which is attributed to the State Tax Administration Agency.

For further information, the full text of the Royal Decree-Law can be consulted on this page.