Invoices will be automatically increased from 1 July 2010 with the announced increase in the value added tax (VAT) from 16 to 18% for products affected by the general type.

There are three sections for VAT exempt items (such as medicines dispensed in hospitals), the super-low of 4% (you pay for basic necessities, especially food staples) and will remain unchanged, the reduced 7% (all other food, bus tickets and normal first transmission housing), which will be 8% and the normal 16%, which applies to all other products and will be increased to 18%.

These are the increases that some common consumer products will experience if the VAT increase is transferred entirely to the price.

Houses The average price of a new home will rise with an average of 1924 euros due to the increase of the reduced VAT rate going up with one point (from 7% to 8%). These are the result of the estimation by the Promoters and Builders Association of Spain (APCE).

Cars The average price of cars, currently around 21,000 euros, would increase by about 420 euros due to the VAT increase going from 16 to 18%. This is the result of an estimation by the National Association of Motor Vehicle Vendors (GANVAM).

Travelling The tours have a reduced VAT rate of 7%. The rise for example of an organized tour of some 1,000 euros would be about 10 euros.

Restaurants The reduced VAT rate applies for restauration in Spain. For a menu of 10 euros, the rise would be only 10 cents, so in these cases, most likely, the tax raise in the final price will depend on each restaurant or bar.

Source El Mundo

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