Consumers with power below 10 kW may apply the 10% reduced VAT rate

The tax treatment of electricity supply has been the subject of a recent clarification by the Tax Administration. The application of the 10% reduced VAT rate is not automatic for all consumers, but is instead subject to technical power requirements and the evolution of energy prices.

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that the 10% reduced tax rate is applicable to deliveries of electrical energy provided that two concurrent conditions are met:

• Contracted power: The holder must have a contracted power equal to or less than 10 kW.
• CPI variation: The reduction is valid until June 30, 2026, but its continuity is conditional on inflation. If the electricity CPI variation in the month of April does not exceed the CPI of the same month of the previous year by more than 15%, the reduced rate will cease to apply in June.

This criterion falls within the scope of application of Royal Decree-Law 7/2026, which establishes measures to respond to the energy crisis.

What this means for you

For individual consumers and companies with low consumption, this implies that the cost of electricity supply will depend on the monitoring of price indices. If your contracted power is greater than 10 kW, you must face the general VAT rate of 21% without the possibility of accessing this measure. In the event that you have power equal to or less than 10 kW, the tax benefit is subject to the stability of electricity prices compared to the previous year.

What you should do

It is necessary to verify the contracted power on the electricity bill to know the possibility of accessing the reduced rate. Likewise, you should pay attention to the evolution of the electricity CPI in the month of April, as this data will determine whether the 10% rate is maintained or if the general rate of 21% must be applied starting in June. Each supply situation must be analyzed according to the bill data and current regulations.