© seemallorca.com
© seemallorca.com
New tax rates start this weekend in Mallorca
Tax hikes shouldn't hit your holiday in Mallorca too hard this year
The new IVA (VAT) rates will come into effect this Saturday across mainland Spain and Mallorca. Luckily for visitors and tourists there will be exceptions in certain areas of the tourism and travel industry meaning the hikes will not be as severe as in other sectors. Meetings have been ongoing between the Mallorcan Association of Tourist Attractions (AMAT) and Business Association of Balearic Travel Agencies (IVIBA) who argue that the central government had promised not to increase the VAT on leisure and tourism by the proposed 13%. The IVIBA and AMAT said that a hike in VAT during the short tourist season would hurt profits and so the tax rise in these sectors has been put on hold until October.
The VAT rise will push the tax to 21% on some items and industries. At the moment VAT in Spain is on three tiers -
IVA General - 18% on non-essential items and services
IVA Reducio - 8% on required services like funerals, haircuts, dentistry
IVA Superreducio - 4% on essential items like bread, milk, cheese, cereals
The tax on food and medicine will remain frozen at 4% but some of the services in the IVA Reducio and even Superreducio bracket will see tax increased to 21%. From Saturday a haircut will cost 13% more and stationary will cost 17% more. A big hit for parents readying kids for back to school.
Elsewhere, in the retail industry, the VAT rise will come into effect and shop owners and small businesses are worried that shoppers will not accept the hike in prices, especially when most shops are advertising sales.
In general the tax changes will not affect tourists visiting Mallorca this summer. As mentioned the tax will not hit tourist attractions and Hotels and bars are getting away lightly too with a small 2% increase to try and keep the industry competitive. There is a large increase in cultural activities and events with the tax on culture jumping from 8-21% and "discos" will see a 13% rise too.
So although the people of Mallorca will see big changes when the tax increases this weekend most tourists will not see a significant difference.
