VAT on electricity in Spain: will fall to 10% in most cases

The VAT on electricity will fall for most households temporarily. It was at 21% and will remain at 10% until the end of the year. We explain who will be affected by this exceptional measure.

How much is VAT on electricity in Spain?

The VAT on electricity in Spain is generally 21%. However, a reduction to a new VAT rate of 10% was recently approved for the majority of consumers. 

This measure is temporary (until December 31, 2021) and you can benefit from this reduction only if you meet the criteria specified in Royal Decree-Law 12/2021 of 24 June.

So that you do not have to read the Royal Decree, we will tell you about these criteria.

 

To whom does the VAT rate of 10% on electricity apply?

The reduction of VAT on electricity to 10% will affect the vast majority of consumers, but they will have to comply with these conditions:

 

1. Contracted power equal to or less than 10 kW

The vast majority of Spanish households and small businesses have a contracted power of between 3 and 6 kW. In all these cases a reduced VAT of 10% for electricity will be applied for contracted powers equal to or less than 10kW.

 

2. When the wholesale price of electricity exceeds €45 per MWh

The purpose of lowering the VAT on electricity is to offset occasional increases in electricity due to the costs of producing and marketing electricity. These costs are fixed in daily auctions. 

When the sale price is high (above €45 per MWh) the VAT rate of 10% will be applied. If the price of electricity in the wholesale market falls below that value, the VAT rate for electricity would again be 21%, regardless of the contracted power you have. At present, it seems unlikely that the price will fall below €45 in the coming months.

Remember, we are talking about a temporary measure until 31 December 2021. From that date, normality will resume, in other words, a VAT rate of 21% for all cases. 

 

3. Clients with a Social Bonus

All users of the regulated market who have a valid Social Bonus and a recognised status of vulnerability will benefit from the reduction of VAT on electricity.

For these customers, and for the duration of the measure, the VAT on electricity will always be maintained at 10% instead of 21%, regardless of the price in the wholesale market auctions. 

 

Why is the VAT on electricity going down?

The VAT on electricity has been reduced to 10% to try and offset the rise in electricity prices caused by an increase in the cost of energy production. In the last year, it had increased at specific times because the price of electricity depends on varying factors.

 

How will the reduction in VAT on electricity affect you?

From now until 31 December of this year, the vast majority of customers will benefit from a lower rate of VAT on electricity in Spain.

As the VAT on electricity is applied after you have totalled all the costs of your bill, this measure could mean a saving by applying 10% instead of 21% in the vast majority of cases.

 

Are other electricity taxes going down?

Although the reduction of the VAT on electricity is the main measure of the new decree and is the only one that is immediately applicable (from 26 June 26 2021), other decreases in electricity taxes are also included in the new regulations.

On an exceptional basis, the aim is to eliminate the electricity tax during the last quarter of the year. It is a tax of around 5% and you can find it on your electricity bill in the other items section. 

{{content.phone.title}}

{{content.phone.text}}

{{content.phone.phoneText}}

{{content.form.title}}

{{content.form.text}}

{{content.form.errors.required}}

{{content.form.errors.phone}}

{{content.form.errors.server}}

{{content.form.success.title}}

{{content.form.success.message}} {{model.phone}}

{{content.cta.title}}

{{content.cta.text}}

Back Lorem ipsum dolor sit amet, consectetur adipisicing elit. 50 icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Calendar icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Empresa icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Gas icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Sunset icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Hogar icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. 24h icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Luz icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Luz Gas icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Moon icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Settings icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Sun icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Time icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. 2h_1 description_2h_1 24h description_24h 50h description_50h big_business description_big_business big_corporations description_big_corporations business description_business calendar description_calendar condo_manager description_condo_manager darksite description_darksite electric_energy description_electric_energy electricity_gas description_electricity_gas config description_config electricity_gas_config description_electricity_gas_config electricity description_electricity email description_email fax_1 description_fax_1 gas_big_business description_gas_big_business gas_big_corporation description_gas_big_corporation gas_medium_business description_gas_medium_business gas description_gas go_to_enel.com description_go_to_enel heater description_heater heating_maintenance description_heating_maintenance home description_home kitchen description_kitchen maintenance description_maintenance medium_business description_medium_business night description_night personal_website description_personal_website phone_call description_phone_call renewables description_renewables solar_panel description_solar_panel some_hours description_some_hours thumb_down_solid description_thumb_down_solid thumb_down description_thumb_down thumb_up_solid description_thumb_up_solid thumb_up description_thumb_up

What is the VAT rate on electricity in other countries?

VAT on electricity in Portugal

Recently, countries such as Portugal or Greece decided to lower the VAT on electricity to 6% in the fixed part of the bill, which does not depend on consumption.

In the case of Portugal, according to the initial figures, the reduced VAT on electricity affects 42% of electricity contracts. The rest continue to pay VAT at 23%.

 

VAT on electricity in France

In France, 5.5% VAT is applied for fixed items such as contracted power, while 20% is applied to electricity consumption. With this VAT model, France is one of the main EU countries to have opted for a variable VAT rate on electricity.

 

VAT on electricity in Italy

The VAT on electricity in Italy is 10% and, although in absolute terms it is not the lowest in the EU, it applies to the entire bill.

Like Spain, they too have opted for a fixed rather than variable VAT model for electricity, becoming one of the EU countries with a lower general VAT on electricity.

 

VAT on electricity in Germany

Germany applies two rates of value-added tax throughout the country, 19% overall and 7% reduced. In the case of VAT on electricity in Germany, the 19% rate applies.

 

Countries with the same VAT on electricity as Spain

Spain is not the only EU country to have a VAT rate of 21% on electricity. In this group it is joined by  Belgium, the Netherlands, the Czech Republic, Latvia and Lithuania.

Countries with a similar VAT rate are Austria (20%), Slovakia (20%), Bulgaria (20%) and Estonia (20%).

 

Countries with the highest VAT rate for electricity in the EU

The countries with the highest VAT rate for electricity in the EU are the Nordic countries. According to data from the European Commission, the customers who pay the most VAT on electricity are those in  Denmark (25%) and Sweden (25%), followed by Finland (24%).

With the new VAT rate of 10% (until 31 December 2021), Spain is among the EU countries that have the lowest VAT rate. 

Back Lorem ipsum dolor sit amet, consectetur adipisicing elit. 50 icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Calendar icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Empresa icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Gas icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Sunset icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Hogar icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. 24h icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Luz icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Luz Gas icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Moon icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Settings icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Sun icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. Time icon Lorem ipsum dolor sit amet, consectetur adipisicing elit. 2h_1 description_2h_1 24h description_24h 50h description_50h big_business description_big_business big_corporations description_big_corporations business description_business calendar description_calendar condo_manager description_condo_manager darksite description_darksite electric_energy description_electric_energy electricity_gas description_electricity_gas config description_config electricity_gas_config description_electricity_gas_config electricity description_electricity email description_email fax_1 description_fax_1 gas_big_business description_gas_big_business gas_big_corporation description_gas_big_corporation gas_medium_business description_gas_medium_business gas description_gas go_to_enel.com description_go_to_enel heater description_heater heating_maintenance description_heating_maintenance home description_home kitchen description_kitchen maintenance description_maintenance medium_business description_medium_business night description_night personal_website description_personal_website phone_call description_phone_call renewables description_renewables solar_panel description_solar_panel some_hours description_some_hours thumb_down_solid description_thumb_down_solid thumb_down description_thumb_down thumb_up_solid description_thumb_up_solid thumb_up description_thumb_up

Spend a minute to find the product which best adapts to you:

{{firstStep.title}}

We are finding the right energy for you...

Related posts

Light

How much does light cost?

Light

When is energy cheaper?

Light

Your Endesa bill made easy

advise icon go to the advise Facebook icon go to Facebook Twitter icon go to Twitter Youtube icon go to Youtube Messenger icon go to Messenger Linkedin icon go to Linkedin Instagram icon go to Instagram Shared Link icon Go to the shared link Checkmark Success icon Checkmark Success down arrow icon down arrow Previous Go to previous Next Go to the next close icon close add icon add up arrow icon up arrow oblique arrow icon look obliquely Arrow down icon Arrow down search engine icon search search engine icon search share icon share filter icon filter email icon send mail email icon email phone icon phone fax icon fac print icon print play icon play user icon go to the user section error icon an error has occurred info icon information thumb up icon like thumb up icon like thumb down icon don't like thumb down icon don't like clock icon Clock Lamp icon Lamp List icon List Map icon Go to the map Phone icon Phone Emergency icon Emergency Pause icon Pause Play icon Play Logout icon Sign off Phone icon Phone