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A query was raised regarding whether the reduced 5% VAT rate on electricity supplies should apply to the entire invoice or proportionally if the contracted power changes during the period. The Directorate-General for Tax (DGT) ruled that the applicable rate is the one in force at the time each charge accrues.
This ruling clarifies that VAT rates for electricity are determined by the specific moment of accrual for each component of the bill, rather than a single rate applied to the whole invoice if rates change mid-period.
The tax team reviews your specific situation.
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