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V1245-22 3 June 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · cobertura de riesgo

Electricity price hedging may be subject to VAT or exempt depending on its nature and settlement

A taxpayer has requested clarification regarding the VAT treatment of electricity price risk hedging services. The DGT distinguishes between energy sale and purchase contracts (subject to VAT) and financial swaps (exempt due to their financial nature).

The question raised

Whether the electricity price variation risk hedging operations consulted are subject to, and where applicable, exempt from value added tax and whether they are subject to the obligation to issue an invoice.

The DGT's ruling

Contracts involving the physical delivery of electricity are considered sales and are subject to VAT. Financial swap contracts that only hedge price fluctuations without the intention of physical delivery are exempt financial services. Positive settlements in favor of clients in these swaps are not services and are not subject to VAT. There is an obligation to issue an invoice in exempt operations if they are carried out by entrepreneurs within the territory of application of the tax.

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