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The Council of Ministers announced the reduction of VAT on electricity this Thursday, based on household consumption.
The measures come into effect on December 1 due to lower consumption. The total estimated cost of the measures is 150 million euros and “will cover some 5.2 million contracts (86% of low voltage customers)”, details the statement from the Council of Ministers.
“All contracts included in the Normal Low Voltage (BTN) up to a contracted capacity of 6.9 kVA (limit of the social energy tariff) the application of the 13% tariff to consumptions up to 100 kWh (for a period 30 days), applying the remaining 23% normal rate ”, says the Government note.
For large families (with five or more elements) “this consumption step, for the purposes of applying the VAT rate of 13%, is increased by 50% (that is, 150 kWh)”.
The measure consisted of a legislative authorization in the State Budget for 2020 (OE2020) that expires on December 31. In practice, the Government’s proposal to reduce VAT on electricity establishes that households that consume the least amount to a minimum tax rate of 6% or an intermediate rate of 13%, while the highest consumption levels would remain at the current maximum tax rate. 2. 3%.
In OE2020 it is written that if the decrease will be determined through “levels of electricity consumption based on the contracted power structure existing in the electricity market, applying rates of 6% and 13% to low-value electricity supplies.”
The measure was evaluated by the VAT Committee of the European Commission, which found no objections to the claims of the Executive.
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