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Spain will halve VAT on electricity from 10% to 5%

23 Jun 2022

Spain intends to halve the value-added tax (VAT) charged on electricity bills further, to 5% from the current 10%. In March 2022, The Spanish government had already approved measures to limit the surge in energy prices, extending until 30 June 2022 the reduction of VAT to 10% for consumers below 10 kW.

In 2021, the country slashed the VAT rate on electricity to 10% from the original rate of 21% to ease the impact of wholesale electricity price rises on consumers. Spain has also suspended a 7% tax on the value of electricity generation, which utilities ultimately pass on to the retail market price.

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