In Spain, more than four million people face acute financial hardship. For them, support from charity organizations that collect food is a matter of survival. However, despite a law that exempts food donations from VAT, the government continues to tax charitable foundations.
Since April this year, a regulation has come into force aimed at encouraging donations of essential goods and food. The Law on the Prevention of Loss and Food Waste establishes a zero VAT rate for all types of donations to non-profit organizations. Nevertheless, the government has yet to implement the necessary procedures for this benefit to take effect. As a result, charities that purchase food with donations from citizens and companies are forced to pay millions of euros in taxes every year—taxes that, according to the law, should no longer be imposed.
The situation has become particularly acute on the eve of the annual large-scale food drive, when demand for assistance peaks. Leaders of major charitable organizations note that funds spent on VAT could instead be used to purchase more goods for families in need. Despite repeated appeals to authorities, neither the prime minister nor relevant ministers have provided clear answers to calls for a faster rollout of the tax exemption mechanism.
The law has been passed, but it isn’t working
The path to eliminating VAT on donations was long and complicated. The initiators of the changes note that it took years to agree on and adopt the necessary amendments. However, even after the law was published in the official bulletin and came into force, nothing changed in practice. The Ministry of Finance cites technical difficulties, although representatives of charitable organizations point out that similar issues have been resolved before, even when it came to more complex reforms.
The problem is made worse by the fact that previous attempts to redirect tax revenues from donations toward purchasing food for the needy were blocked on the grounds of increasing government spending. This sparked frustration among volunteers and donors who have spent years fighting for fair treatment of charitable giving.
The number of people in need is growing
According to the latest data, nearly 26% of the population is living on the brink of poverty, and more than four million people are in extreme need. For them, even modest support in the form of food packages is critically important. However, due to bureaucratic delays, a significant portion of donated funds is spent on taxes instead of helping people.
With the economic situation remaining tense and the number of people in need not decreasing, charitable organizations are demanding that the authorities immediately implement the provisions of the law or at least temporarily compensate the losses through a special fund. They believe that the delay in introducing the VAT exemption mechanism undermines trust in the government and hampers effective efforts to combat poverty.
Meanwhile, despite all the efforts and adopted laws, Spanish food banks continue to pay a tax that should have been abolished six months ago. This jeopardizes the ability to provide timely assistance to millions of citizens facing difficult life circumstances.
