Liquefied petroleum gas (LPG) supply will be subject to a reduced VAT rate of 10%

The tax treatment of liquefied petroleum gas (LPG) has been defined following a recent resolution from the Tax Administration. The criteria establish the conditions under which this supply may benefit from a reduction in the Value Added Tax (VAT) rate.

What the DGT has resolved

The Dirección General de Tributos (DGT) has determined that the supply of liquefied petroleum gas (LPG) is subject to the reduced VAT rate of 10%, provided its purpose is general use or uses other than fuel. This decision is based on the fact that such products are included in headings 1.6 and 1.8 of the first tariff of article 50.1 of Law 38/1992.

The application of this reduction follows the provisions of article 42 of Royal Decree-Law 7/2026, of March 20, which approves the Comprehensive Response Plan to the Crisis in the Middle East. Consequently, the 10% tax rate is applicable when LPG is not used as fuel for vehicles.

What this means for you

This criterion has direct repercussions for different profiles:

• Individual consumers: Those who use propane or LPG in their homes for heating or cooking will be able to benefit from this reduced tax rate on their bills.
• Supply companies: Commercial entities that market these products must correctly apply the 10% rate in their general supply operations, ensuring compliance with current regulations.

What should be done

It is necessary to verify the intended use of the LPG in each commercial transaction. If the product is intended for fuel, the 10% reduction cannot be applied. It is recommended that supply companies review their billing processes to ensure that the product classification and its final use match the headings of Law 38/1992 and Royal Decree-Law 7/2026. Since the application depends on the nature of the use, each situation must be analyzed to avoid errors in the tax settlement.