The sector celebrates the abolition of VAT applied to product donations

The business associations that represent the entire value chain of large consumption and hospitality (Aces, Aecoc, Anged, Asedas, Fiab and Restoration Brands) and third sector organizations (World Vision) celebrate approvalin the Congress of Deputies, of the 3rd final provision of the Law on Waste and Contaminated Soils, which modifies article 91 of Law 37/1992 on Value Added Tax. This modification of the regulations allows a 0% VAT to be applied on donations of products to non-profit entities.

The application of VAT, as provided until now in Spanish legislation, was a brake on the donation of those products (including food) which, for certain reasons, remained outside the commercial circuit and an obstacle to minimizing the 138 million tons of waste that are currently generated in Spain and that represent 4.3% of total greenhouse gas (GHG) emissions. For this reason, prominent business organizations led an initiative that, under the name of Donate to take care of the planet, pursued the abolition of VAT on product donations through the Waste and Contaminated Soil Law approved yesterday.

The elimination of VAT applied to donations of food and products non-food places Spain on the same path as European Union countries such as Belgium, France, Germany, Greece, Hungary, Italy or Poland, and It means advancing in the reduction of waste generation and in the creation of a circular economy model.

The modification will prevent many companies, especially smaller ones, from having to give up donating goods because it is economically burdensomesince in the current situation donations are subject to VAT that is not recovered later.

The associations hope that the new regulatory context will allow an increase in product donations and show the advantages of promoting an incentive taxation model, especially in social and environmental issues. In that sense, consider that this new measure will allow progress in meeting the sustainable development goals established in the 2030 Agendasince product donations are strategic in the fight against waste, generate benefits in terms of sustainability and provide opportunities to vulnerable groups.

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