Wood for fuel or pellet manufacturing will be taxed at 10% VAT

The Directorate General of Taxes (DGT) has clarified the tax treatment applicable to wood when its purpose is energy recovery. This criterion determines the VAT rate that companies must apply in their operations involving the delivery of this material.

What the DGT has resolved

The ruling analyzes whether the acquisition of wood by a taxpayer can benefit from the reduced 10% rate provided for in current regulations. The binding body has determined that deliveries of wood intended to be used directly as fuel, or for the manufacture of chips, briquettes, or pellets, fall within the scope of application of Article 42 of Royal Decree-Law 7/2026.

Consequently, these operations are subject to the 10% VAT rate. Likewise, the DGT has specified that this criterion extends to the temporary application conditions established in Royal Decree-Law 18/2026.

What it means for you

If your professional activity consists of the commercialization of wood for energy purposes, you must take into account the following implications:

• Tax rate: Deliveries of wood intended to be fuel or raw material for derived products (chips, briquettes, or pellets) must be invoiced at the reduced rate of 10%.
• Scope of destination: The benefit of the reduced rate depends strictly on the final use of the wood. If the destination is use as fuel or transformation into the aforementioned products, the reduction is applicable.
• Temporality: The application of this reduced rate is linked to the deadlines and conditions set by the regulations responding to the current crisis.

What you should do

It is necessary to verify that the purpose of the delivered wood meets the destination requirements established in the regulations to avoid errors in the tax settlement. Since the application of this tax rate depends on the nature of the product and its intended use, it is recommended to assess each operation and the documentation certifying the destination of the goods to ensure compliance with current regulations.