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Endesa - Electricity, Gas, People

How does the new VAT on electricity affect households and businesses?

The Government published Royal Decree-Law 12/2021 on 24 June in the Spanish Official State Gazette (BOE) which applies a reduction of VAT on electricity from 21% to 10%.

How do these changes affect your electricity supply?

From its entry into force on 26/06/2021, and until 31/12/2021, 10% VAT will be applied provided that the following conditions are met:

  • The supply is for a contracted power equal to or less than 10 kW (the vast majority of households). You can check your contracted power in your client area.
  • Always provided the market price for the previous calendar month is above €45/MWh. You can see developments in market prices here.
  • Only applicable to bills issued after 26 June and until 31 December 2021.

To summarise, VAT on electricity will change from 21% to 10% temporarily until 31 December 2021, applicable to electricity supplies with a contracted power equal to or less than 10 kW and provided that market prices remain above €45/MWh.

infographic of the necessary steps to know what VAT is applied to you
VAT applicable from June 26 to December 31, 2021
  Energy price
> €45/MWh
Energy price
< €45/MWh
P ≤ 10 kW VAT 10% VAT 21%
P > 10 kW VAT 21% VAT 21%
Rate Subsidy Beneficiary VAT 10% VAT 10%

The vast majority of Spanish households fall within this range (≤10kW).

If I qualify for the Social Rate, how do these changes affect me?

The holders of electricity supply contracts who qualify for Social Rate for electricity and whose status has been recognised as severely vulnerable or severely vulnerable at risk of social exclusion (in accordance with the provisions established in Royal Decree 897/2017) will benefit from the decrease in VAT.

For this category of client, and until 31 December 2021, the VAT on electricity will remain at 10% instead of 21%, regardless of the market price and the contracted power.

Which items on the bill are affected by the reduction of VAT to 10%?

If your contracted power is equal to or less than 10 kW and the criteria for market prices are met, the VAT that you will have to pay on the bills issued after 26 June will be 10% on the following items: access tariffs, energy consumption and meter rental.

There are other items on the bill such as services, connection charges, grid connection charges, etc., to which the 21% VAT rate will continue to apply.


How long will the new VAT rate last?

The new VAT rate on electricity is expected to last until 31 December 2021, providing market prices remain above €45/MWh.

Does it also affect other supplies such as gas and services?

No, these changes are only applicable to the electricity supply.

 

Our network of channels is at your disposal if you need further information. If you prefer, any query you may have can be answered without you leaving your home via our Video Support Service, on which specialised agents will be delighted to answer your questions.