New aid and tax cuts due to the war in Ukraine

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1. The energy tax cuts are extended through 2023: the VAT on natural gas, briquettes and firewood stays at 5%, the VAT on electricity stays at 5% for many supplies, and the Special Tax on Electricity stays at 0.5%. In addition, through December 31, 2023, electricity, gas and water cannot be cut off for vulnerable consumers.
2. The maximum price of the butane bottle is frozen until June 30, 2023. If the theoretical price falls, the difference will be recovered in later price reviews.
3. Aid for farming and fishing: 0.20 euros per liter of agricultural diesel consumed in 2022, aid for the rising cost of fertilizers (up to 22 euros per hectare of dryland and 55 of irrigated land), up to 120 million euros for fishing vessel owners, and a six-month exemption from the fresh fishing fee.
4. Cheap public transport is extended through 2023: Renfe commuter (Cercanías and Rodalies) and medium-distance passes remain free for regular users, and regional and local governments that cut pass prices by 50% receive state aid. On state-run bus services, regular travelers get a 100% discount starting February 1, 2023.
5. A temporary VAT cut on food from January 1 to June 30, 2023: 0% for bread, flour, milk, cheese, eggs, fruit, vegetables, greens, legumes, tubers and cereals, and 5% for oils and pasta. If underlying inflation falls below 5.5%, these cuts are withdrawn in May.
6. A new one-time aid of 200 euros is created for people with low income and assets who in 2022 worked as employees or self-employed or were unemployed, and who do not receive pensions or the minimum vital income. Applications are filed on the Tax Agency website from February 15 to March 31, 2023.
7. The cap on the annual rent increase for housing is extended until December 31, 2023: if the parties do not agree, the update cannot exceed the variation of the Index of Competitiveness Guarantee. Tenants can also request an extraordinary six-month extension of their usual home lease.
8. Non-contributory pensions and the minimum vital income are raised by 15% compared to their amount on January 1, 2022, and the 2022 minimum wage is extended until the 2023 minimum wage is approved through social dialogue.

Who it affects

• Households and consumers: Pay less VAT on gas, electricity and many basic foods during 2023.
• Farmers, ranchers and fishers: Receive aid for agricultural diesel, fertilizers and marine diesel, and are exempt from the fresh fishing fee for six months.
• Road and maritime transport companies: Collect aid for professional diesel or direct per-vehicle aid, and toll highway rate increases are capped at 4%.
• Public transport users: Keep free or discounted public transport passes during 2023.
• Low-income people and tenants: Can apply for the one-time 200 euro aid and see the rent increase on their home capped.

Words worth knowing

IVA

Value Added Tax (VAT): a percentage added to the price of almost everything you buy, collected by the State.

Consumidor vulnerable

Vulnerable consumer: a person or household with low income that the law protects so their electricity, gas or water cannot be cut off.

Ingreso Mínimo Vital

Minimum vital income: a Social Security benefit that guarantees a minimum income to households in poverty.

Índice de Garantía de Competitividad

Index of Competitiveness Guarantee: a price indicator similar to the CPI but more stable, used as a cap on rent increases.

Pensión no contributiva

Non-contributory pension: a retirement or disability pension paid when the person has not contributed enough.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries