The VAT on electricity in Spain is today 21%, the standard rate. Between 22 March and 31 May 2026 it was reduced to 10% for almost all households, and it went back up in June because the cut was tied to electricity inflation and that condition was not met. Here you can see what rate electricity, gas and firewood carry today, with which rule and what it is calculated on.
The full country overview is in our VAT in Spain in 2026 guide. This page covers energy only.
What VAT electricity has in Spain today
| Supply | VAT | Legal basis |
|---|---|---|
| Electricity, whatever the power | 21% | art. 90 LIVA |
| Natural gas | 21% | art. 90 LIVA |
| Wood briquettes, biomass pellets and firewood | 21% | art. 90 LIVA |
| Solar panels or batteries not installed | 21% | art. 90 LIVA |
| Installation of solar panels in a home, subject to requirements | 10% | art. 91.Uno.2.10.º LIVA |
The key point: the VAT Law does not have any permanent reduced rate for energy. Its article 91, the closed list for 10% and 4%, does not mention electricity or gas. The cuts have always come through separate royal decree-laws, with an expiry date built in. When they expire, electricity goes back to 21% automatically.
The 2026 cut: 10% from March to May
Royal Decree-Law 7/2026, of 20 March, on the Comprehensive Response Plan to the Crisis in the Middle East, reduced VAT on several energy products from 21 to 10% from the date it entered into force —22 March 2026— until 30 June. Its article 42 applied to:
- Holders of contracts whose fixed power term was below 10 kW. Royal Decree-Law 10/2026, of 28 April, changed that “below” to “below or equal to”: from 30 April, contracts of exactly 10 kW were also included.
- Recipients of the social bonus with the status of severely vulnerable or severely vulnerable at risk of social exclusion.
- Natural gas, briquettes, biomass pellets, firewood and fuels, with no power condition.
At the same time, article 40 kept the Special Tax on Electricity at 0.5%, compared with the ordinary 5.11269632%.
But the rule had a built-in brake. Each line of article 42 said the same thing: if in April the year-on-year change in electricity CPI (or gas, or fuels) did not exceed 15%, the cut would stop applying in June. In April 2026 electricity recorded −4.3% and gas −9.6%. Not even close: the 10% rate ended on 31 May.
August and September: the cut that was not triggered
Royal Decree-Law 18/2026, of 29 June did not extend anything: it set up a cut that would activate automatically if inflation spiked. Its articles 10 to 13 would have restored 10% VAT on electricity and gas —and 0.5% on the electricity tax— in August if June CPI exceeded the 15% threshold, and in September if July CPI did.
| CPI month (INE) | Electricity | Natural gas | Affected month | Applied rate |
|---|---|---|---|---|
| April 2026 | −4.3% | −9.6% | June 2026 | 21% |
| June 2026 | +6.0% | +0.8% | August 2026 | 21% |
| July 2026 | +8.4% | +4.1% | September 2026 | 21% |
None of the three doors opened. And since October 2026 there is no rule providing for another cut: 21% remains in force until a new royal decree-law is approved.
All VAT cuts on electricity since 2021
| Period | Electricity | Gas | Firewood and pellets | Rule |
|---|---|---|---|---|
| 26 Jun. 2021 – 30 Jun. 2022 | 10% | 21% | 21% | RDL 12/2021, extended by RDL 29/2021 and 6/2022 |
| 1 Jul. – 30 Sep. 2022 | 5% | 21% | 21% | RDL 11/2022, art. 18 |
| 1 Oct. – 31 Dec. 2022 | 5% | 5% | 5% | RDL 17/2022, arts. 5 and 6 |
| All 2023 | 5% | 5% | 5% | RDL 20/2022, art. 1 |
| 1 Jan. – 31 Mar. 2024 | 10% | 10% | 10% | RDL 8/2023, art. 21 |
| 1 Apr. – 30 Jun. 2024 | 10% | 21% | 10% | RDL 8/2023, art. 21 |
| 1 Jul. – 31 Dec. 2024 | 10% | 21% | 21% | RDL 8/2023, art. 21 |
| All 2025 | 21% | 21% | 21% | No reduction rule |
| 22 Mar. – 31 May 2026 | 10% | 10% | 10% | RDL 7/2026, art. 42 |
| From 1 Jun. 2026 | 21% | 21% | 21% | Expiry of RDL 7/2026 |
One detail that is often forgotten: between 2021 and 2024 the electricity cut was not automatic. In addition to the 10 kW cap, it required that the average daily market price in the previous month had exceeded €45/MWh; if it was below that, those bills were taxed at the full rate. The 2026 cut had no price condition.
How your bill is split and what VAT is applied to
| Item | What it is | Included in the VAT base? |
|---|---|---|
| Power term | The contracted kW, whether you use them or not | Yes |
| Energy term | The kWh used during the period | Yes |
| Special Tax on Electricity | The 5.11269632% on power and energy, with minimums of €0.5/MWh for industrial uses and €1/MWh for the rest | Yes |
| Meter rental | The meter, if it is not yours | Yes |
| Additional supplier services | Maintenance and insurance | Yes |
VAT is calculated on everything above, including the electricity tax. This is not a mistake: article 78.Two.4.º of the VAT Law includes in the tax base “taxes and levies of any kind that fall on the same taxable transactions”, including special taxes. And the electricity tax is, in turn, calculated on the supply base for VAT purposes without including itself (article 97 of Law 38/1992). It is tax on tax.
And what rate applies to a bill that crosses the month change? For supplies, VAT becomes chargeable when each part of the price becomes due (art. 75.One.7.º) and the rate in force at that time applies (art. 90.Two). It is not split by days: the due date governs.
Does a rate change force you to update every product?
When a royal decree-law changes a rate overnight, the expensive part is not the tax: it is reviewing the catalogue. EHERO Woo VAT applies the correct rate according to each product’s tax class and the customer’s country, monitors the €10,000 distance-sales threshold and validates the VAT ID in VIES during checkout.
VAT on solar panels in Spain: 10 or 21%?
It depends on whether you are buying a product or contracting a job. Buying the modules, inverter or batteries is a supply of goods: 21%. Contracting the installation in an already built home can be taxed at 10% as renovation and repair work, but only if all three requirements of article 91.One.2.10.º are met at the same time:
- The recipient must be a natural person acting as a non-business customer and using the home for private use. A homeowners’ association also qualifies.
- The construction or renovation of the home must have finished at least two years before the work starts.
- The contractor must not supply materials or, if they do, their cost must not exceed 40% of the taxable base.
The third condition decides almost all real cases: in a photovoltaic installation, the panels, inverter and especially the batteries weigh heavily, and if the materials exceed 40% the whole operation is taxed at 21%, labour included. Ask for the breakdown before signing. Separate case: work between developer and contractor to build or renovate the home is taxed at 10% (art. 91.One.3.1.º).
Spain therefore has no special treatment for self-consumption. Germany does: there, modules, batteries and their installation in homes are taxed at 0%, as you can see in our VAT rates in Germany table; the 27 countries are in the VAT rates by EU country in 2026.
Canary Islands, Ceuta and Melilla: no VAT is charged there
All three territories are outside the scope of Spanish VAT (art. 3 of the VAT Law). Electricity consumed by a household in the Canary Islands does not carry VAT: it carries IGIC.
And the difference is big. The consolidated IGIC text (Legislative Decree 1/2025) applies a zero rate to “electricity supplied by retailers to natural persons who are holders of a point of electricity supply in their home with contracted power equal to or below 10 kW per home” (art. 33.One.22.º). Outside that, the general IGIC rate applies, 7% (art. 32). The average Canary Islands household pays 0% for electricity; the mainland household, 21%. Details are in our VAT in the Canary Islands guide.
In Ceuta and Melilla, IPSI applies, a tax specific to each city whose rates are set by its tax ordinance: it is advisable to check it before relying on any figure.
Frequently asked questions
What VAT does electricity have in Spain in 2026?
21%. There was 10% from 22 March to 31 May for contracts up to 10 kW, under Royal Decree-Law 7/2026, but it lapsed because electricity inflation did not reach the threshold required by the rule itself.
Why did one bill have 10% and the next 21%?
Because for supplies, the rate in force when each part of the price becomes due is applied. The bill is not split by days: if the amount became due in June, the whole bill is taxed at 21%.
Who was the 2026 10% rate applied to?
Contracts with a fixed power term below 10 kW —“below or equal” from 30 April— and recipients of the social bonus with severely vulnerable status. Above 10 kW, always 21%.
Does VAT also apply to the electricity tax?
Yes. The VAT base includes taxes that fall on the same transaction, so it is calculated on power, energy, electricity tax and meter rental.
Do solar panels carry 10 or 21%?
Buying them, 21%. Installing them in a home older than two years can be taxed at 10% if the installer’s materials do not exceed 40% of the taxable base.
Sources
- Law 37/1992, on VAT, arts. 3, 75, 78, 90 and 91, and Law 38/1992, on Special Taxes, arts. 97 and 99. Consolidated BOE texts, consulted on 17 September 2026.
- RDL 7/2026, arts. 40 and 42; RDL 10/2026, which amended art. 42; RDL 18/2026, arts. 10 to 13.
- Previous cuts: RDL 12/2021, RDL 11/2022, RDL 17/2022, RDL 20/2022 and RDL 8/2023.
- INE, ECOICOP subclasses: annual change in Electricity and Natural gas.
- Legislative Decree 1/2025, consolidated IGIC text, arts. 32 and 33 (BOC).
Continue here
- VAT on electricity and gas in Europe: the table of the 27 countries
- Electricity consumption calculator: how much each appliance uses in kWh and euros
- VAT in Spain in 2026: rates, registration and distance sales
- VAT in the Canary Islands: how IGIC works
- EU VAT calculator: each country’s rate
- VAT rates by EU country in 2026
