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New types of value added taxes (VAT)

09-06-2010
From July 1st 2010, the new types of value added taxes (VAT) will begin to be applied.

So far, the value added taxes (VAT) have been the following three:

* GENERAL VAT 16% Example: Clothing, shoes, office supplies, electronics, alcoholic beverages, tobacco, etc.

* REDUCED VAT 7% Example: Modified foods (soft drinks, sweets,...) water, hairdressers, new property purchases, hotels, bars and restaurant services, etc.

*SUPERREDUCED VAT 4% Example: Basic foods, not modified (bread, milk, cheese, eggs, vegetable, fruits, cereal,) books, magazines, newspapers, school supplies, medicines, etc.

From July 1st 2010, the new types of value added taxes (VAT) will begin to be applied. The general VAT will rise from 16% to 18%, and the reduced VAT will rise from 7% to 8%. The super reduced tax VAT remain the same at 4%.

You must check the invoices you send out as well as the ones you receive as of the July 1st 2010, using the new rates mentioned above. If you use cash registers that disclose the VAT, you must make the necessary changes or contact your distributor.

Cristobal Ruiz
Tax Advisor

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