Spain reduces the VAT rates on energy

Spain temporarily reduces the VAT rates on certain types of energy until 31 December 2023

## Update: the temporary 5% VAT rate will apply to certain electricity and certain fuel supplies until 31 December 2023. Find here official information.##

Spain adopted several measures to combat inflation, including reducing VAT rates on electricity supplies under certain conditions, as well as on natural gas and briquettes and pellets from biomass and wood for firewood.

The VAT rate cuts are in principle effective until 31 December 2023. These are the energy supplies concerned by the reduction:

  • Electricity: reduction to 5%, instead of 10%, in the VAT rate applicable to all components of the electricity bill for electricity contracts whose fixed power term does not exceed 10 kW, when the average monthly wholesale market price in the month prior to the month of invoicing has exceeded 45 €/MWh. Also, for most vulnerable consumers, the 5% VAT rate shall apply irrespective of the price of electricity on the wholesale market. Temporary reduction on electricity applies from 1 July 2022 and until 31 December 2022.
  • Natural gas and briquettes and pellets from biomass and wood for firewood: reduction to 5%, with no further conditions. The temporarily reduced VAT rate will apply from 1 October, 2022 and will be valid until 31 December, 2023.

Both the SII system and the Spanish VAT return form (modelo 303) have been adapted to accept the new 5% VAT rate from July 2022 to December 2023.

You can find detailed information about VAT rates in Spain in our dedicated article of our country manuals.


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