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Will VAT on electricity in Spain fall to 10% in December? It depends on one figure out on 13 November

10 November 2026 · Equipo LUZ123

Your Spanish electricity bill currently carries 21% VAT (IVA) and 5.11% electricity tax. In December both could fall, to 10% and 0.5%, but only if one condition is met: the electricity component of October's consumer price index must be more than 15% higher than in October 2025. Spain's statistics office, the INE, publishes that figure on 13 November. We will update this article the same day.

What the rule says

The cut is set out in Royal Decree-law 25/2026 of 29 September, published in the BOE (Spain's official gazette) on 30 September. It is not guaranteed. It works as a safeguard that only switches on if prices jump.

  • VAT (article 19): if the "Electricity" sub-index of the October 2026 CPI is more than 15% above October 2025, VAT on electricity falls from 21% to 10% for December.
  • Electricity tax (article 21): on the same condition, the electricity tax (Impuesto Especial sobre la Electricidad) falls from 5.11269632% to 0.5% for December, with a minimum of 1 euro per MWh used (0.5 euros for industrial use).

The same mechanism applied to November, using the September figure.

Why November stayed at 21%

According to the INE, which published the figure on 14 October, electricity prices rose 11.4% year on year in September. That is short of 15%, so November bills carry 21% VAT and the full electricity tax.

That may seem odd, because the price per kWh on the regulated tariff (PVPC) was 36% higher in October than a year earlier. The reason is that the CPI covers what all households pay, including those on fixed-price contracts in the free market, and those prices do not follow the market month by month. So the index moves far less than the PVPC.

Will it happen in December?

Nobody knows for certain until 13 November. October was the most expensive month on the wholesale market in more than three years, but the published estimate puts electricity inflation below 15%. To trigger the cut, the electricity index would have to rise more than 5% between September and October, and October 2025 was already an expensive month. December will most likely stay at 21%, but it is not decided.

Who the cut would cover

If it switches on, it does not apply to everyone in the same way:

  • 10% VAT: contracts with a contracted power of 10 kW or less, which is usual for homes and many small businesses. Also households receiving the bono social (Spain's social discount on electricity) with "severely vulnerable" status, whatever their power.
  • Contracts above 10 kW: stay at 21% VAT, except severely vulnerable households.
  • 0.5% electricity tax: would apply to every supply, with no power limit.

You don't need to apply for anything. If the cut comes in, your electricity company must apply it. Because your billing period rarely matches the calendar month, the cut may be split across two bills or show up differently from what you expect. Check the VAT and electricity tax lines on the bills that cover December.

What it would mean on a typical bill

As a rough guide: according to Spain's consumer association, the OCU, the October bill on the regulated tariff for a home with 4.6 kW of contracted power using about 292 kWh a month came to 92.44 euros. With 10% VAT and 0.5% electricity tax, a month like that would cost about 80 euros: roughly 12 euros less, or about 13%.

That helps, but only for one month, and only if the condition is met.

What does not change, even if VAT falls

Taxes are worked out on what your electricity company charges. According to the OCU, prices for new customers and at renewal rose very sharply this autumn. A one-month tax cut does not make up for an expensive contract all year.

If your contract renews in the next few months, or you have had a letter with new prices, now is the time to compare. Upload your bill and we will tell you, in English, whether you are paying too much for your actual usage and power.

Frequently asked questions

What VAT is on Spanish electricity bills now?

21%, with the electricity tax at 5.11269632%. The reductions approved in March stopped applying on 1 June 2026. The condition to bring them back has not been met since.

When will we know whether VAT falls in December?

On 13 November 2026, when the INE publishes the final October CPI.

Do I need to apply for the reduction?

No. If the condition is met, your electricity company applies it on the bill.

What if my contracted power is more than 10 kW?

VAT would stay at 21% unless you receive the bono social with severely vulnerable status. The electricity tax cut would still apply to you.

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