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Electricity VAT 2026: how much is it, how is it calculated and how does it affect you?
As of 20 March 2026, the Government has confirmed the return to the reduced VAT rate on electricity bills, reversing the hike to 21% that affected millions of households. This measure is part of a package seeking to cushion the impact of volatility in energy prices and offer immediate relief for citizens.
Read on to resolve all your doubts regarding dates, requirements, and the real savings you will see on your next bill.
Summary of electricity measures: keys to saving
- Reduction of VAT on electricity from 21% to 10%.
- Reduction of the Standard Electricity Tax: from 5.11269632% to 0.5%.
- Suspension of the Electricity Generation Tax.
When does the reduction in VAT on electricity start to apply?
The measures come into force on 22 March 2026, so all invoices issued after the date on which these measures come into force – 22 March – will be calculated using the new VAT rate.
Savings comparison: how much will you pay now?
The difference between paying 21% VAT versus the reduced rate of 10% and the reduction in the Special Electricity Tax represents significant monthly savings. In the following table, you can see practical examples of how your total expenditure will change:
| Estimated consumption before taxes | Situation | Special electricity tax | VAT | Total bill | Estimated monthly savings |
|---|---|---|---|---|---|
| Small household (40 €) | Before the package of measures | 5.1% of €40 = €2.04 | 21% of €42.05 = €8.83 | €50.86 | 6,64 € |
| After the package of measures | 0.5% of €40 = €0.20 | 10% of €40.2 = €4.02 | €44.22 | ||
| Medium household (70 €) | Before the package of measures | 5.1% of €70 = €3.57 | 21% of €73.57 = €15.45 | €89.01 | 11,62 € |
| After the package of measures | 0.5% of €70 = €0.35 | 10% of €70.35 = €7.03 | €77.38 | ||
| Large household or business premises (120 €) | Before the package of measures | 5.1% of €120 = €6.12 | 21% of €126.12 = €26.48 | €152.60 | 19,94 € |
| After the package of measures | 0.5% of €120 = €0.60 | 10% of €120.6 = €12.06 | €132.66 |
Do I have to call Endesa to apply the reduction?
No. It is automatically applied by law. At Endesa, we will adapt the billing system and apply the new percentage from the date set by the Government.
What happens if my bill includes days with VAT at 21%?
Even if your invoice covers days prior to the reduction in VAT to 10%, different VAT rates will not apply. The VAT rate applied does not depend on the period in which the goods or services were consumed. Therefore, if your invoice is issued after the new measure comes into force on 22 March, the total will be calculated using the new VAT rate.
A boost for your wallet
The return to the reduced VAT rate means savings on your electricity bill. Although taxes are just one of the factors that influence the final amount, this reduction, combined with a fixed tariff, can help bring more stability to the family budget.
At Endesa, we will continue to keep you informed of any changes to energy regulations and their impact on your electricity bill.
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You don't need to adapt to Endesa's tariffs because they adapt to you. If you go to our catalogue you can compare the different tariffs for yourself. Or if you prefer, you can answer a few questions and we will take care of comparing all the different electricity and gas tariffs and then make a customised recommendation.
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You don't need to adapt to Endesa's tariffs because they adapt to you. If you go to our catalogue you can compare the different tariffs for yourself. Or if you prefer, you can answer a few questions and we will take care of comparing all the different electricity and gas tariffs and then make a customised recommendation.
Comparison of Electricity and Gas Tariffs
You don't need to adapt to Endesa's tariffs because they adapt to you. If you go to our catalogue you can compare the different tariffs for yourself. Or if you prefer, you can answer a few questions and we will take care of comparing all the different electricity and gas tariffs and then make a customised recommendation.
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