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Fuel: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Refined position Medium confidence 15 rulings · 2014–2026

Current position

Deliveries of wood intended directly to be used as fuel or for the manufacture of wood chips, briquettes, or pellets are taxed at the reduced rate of 10%. This criterion also applies to the temporary application conditions established by current regulations. For other products such as wood chips or sawdust, the 5% rate only applies if their destination is directly for fuel or biomass manufacturing; otherwise, they are taxed at 21%.

The DGT's position has evolved from the management of exemptions in natural gas and VAT deductions on fuel, towards the determination of applicable tax rates for biomass. A change is observed in the rates applicable to wood and derivatives according to emergency regulations, moving from the exclusion of certain products such as almond shells to the application of reduced rates for wood intended for fuel.

Turning points

  1. V0121-23

    Establishes that almond shells are not considered within the scope of application for the 5% reduced rate on biomass.

  2. V0396-23

    Specifies that deliveries of wood chips and sawdust are taxed at 5% only if they are intended directly to be used as fuel or for the manufacture of briquettes or pellets.

  3. V5242-26

    Determines that wood intended directly for fuel or biomass manufacturing is taxed at 10% according to Royal Decree-Law 7/2026.

Analysis based on 14 of 15 rulings with a stated position. Updated 26 September 2026.

Rulings on this topic

15
V1015-26 6 May 2026

10% VAT applies to wood waste for fuel or pellet production

SG de Impuestos sobre el Consumo
tipo impositivo reducidoderivados de la maderabiomasaproductos energéticosámbito objetivo LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 4.2
Affects CompanyExpat · Non-residentIndividual
V0121-23 3 Feb 2023

Almond shells ineligible for reduced 5% VAT rate

SG de Impuestos sobre el Consumo
tipo impositivo reducidobiomasaámbito objetivoentregas de bienesempresario LIVA — Ley 37/1992 del IVA art. 4.1LIVA — Ley 37/1992 del IVA art. 4.2
Affects CompanyExpat · Non-residentIndividual
V0628-14 7 Mar 2014

Full natural gas tax exemption unavailable if part is used as fuel

SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior
gas naturalexenciónmateria primacombustibleimpuesto sobre hidrocarburos Ley 38/1992 de Impuestos EspecialesReglamento de los Impuestos Especiales (RD 1165/1995)
Affects CompanyExpat · Non-residentIndividual

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