Despite announcing earlier this year that VAT would increase from 5% to 10% until the end of 2024, it will revert to 21% from 1 March 2024.

Why is this happening?

The Royal Decree Law 8/2023 established that, as an emergency measure in response to the energy crisis resulting from the conflicts in Ukraine, VAT would remain at a reduced value for electricity supply contract holders (whose contracted power is less than or equal to 10 kW), siempre y cuando el precio de la energía en el mercado diario fuera superior a los 45€/MWh.

Sin embargo, este mes, como resultado del considerable aumento en la generación de energía renovable, el costo de la energía ha descendido significativamente, rondando los 40€/MWh en el mercado.

This situation arises for the first time since the Royal Decree was passed, which means that the requirement to extend the reduced VAT rate is no longer met, and VAT will therefore return to its normal level of 21%.

We regret any inconvenience that this measure may cause and we would like to reiterate that we are at your disposal through our usual channels to help you resolve any doubts or concerns that may arise in this regard.

Evergreen Eléctrica

More detailed information on these amendments can be found in the Official Bulletin of the Spanish Government: https://www.boe.es/buscar/act.php?id=BOE-A-2023-26452