InsiderBusinessVAT exemption of essential goods comes into effect today

VAT exemption of essential goods comes into effect today

A decision by the Council of Ministers to impose a zero VAT rate on a range of essential items including bread, milk, eggs, baby food, menstrual hygiene products and adult diapers comes into effect on Friday.

Government spokesman Konstantinos Letympiotis said the decision was taken to tackle the high prices, as the island is facing persistent high inflation.

On Wednesday, the Tax Department clarified which basic goods will be subject to the zero VAT rate.

It explained that the term “bread” includes all types of bread, fresh or frozen, with or without yeast. However, it does not include baked goods, dried bread and any bread with added ingredients such as raisins, nuts or spices.

Fresh milk (cow’s milk, goat’s milk, sheep’s milk), sugared milk (condensed milk, long-life milk), flavoured milk (chocolate, banana) and plant-based milk (almond, soy, rice) will also be exempt from VAT.

The Council of Ministers’ decision also includes eggs as a basic product with a zero VAT rate, as well as baby food, clarifying that this includes powdered, dry or liquid products intended for consumption by children. Snacks such as crisps, nuts, sweets, chocolate and ice cream are not included.

In addition, children’s and adult diapers are included, as well as menstrual hygiene products such as tampons, sanitary towels and incontinence pads.

The measure will be in effect until October 31, 2023.

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