The government will lower VAT on electricity from 10% to 5%

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The government will lower VAT on electricity from 10% to 5%

The government will lower VAT on electricity from 10% to 5%


Energy Sector Saving 2


Due to the rise in the price of electricity, the Council of Ministers has approved a Royal Decree-Law adopting urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine.

The approved measures consist of a reduction in VAT on electricity from 10% to 5%, a temporary measure against the energy crisis that will affect your electricity bill from July 1, 2022.

The greater the energy consumption, the greater the savings, and will affect all consumers with contracted power of up to 10 kW and as long as the average monthly price of the wholesale electricity market is above 45 euros per MWh.

When will it come into effect?

This measure was approved in the extraordinary Council of Ministers, and will take effect from July 1, 2022 until December 31, 2022.

In the same way, the rest of the tax reduction measures linked to electricity that were in force will be maintained, such as the 0.5% reduction in the Special Tax on Electricity, which went from 5.1% to 0.5% already in 2021.

This is the largest electricity tax reduction in history, with an impact of more than 10,000 million euros since they were implemented in June 2021.

Sources:

  • La Moncloa
  • Hacienda
  • Libre Mercado
  • Bolsamanía

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