The electricity tax cut is coming to an end – completely – after three and a half years.
As from January 1st 2025, the modulation of IVA based on the average monthly price of electricity in the wholesale market ends, as it returns to 21% permanently.
The Government, due to the energy crisis, lowered the taxes on electricity in June 2021 to 10% and subsequently, from July 1, 2022 until the end of 2023, it was cut to 5%.
“As a result of this increase, the average household will pay approximately €5.42 more per month on their electricity bill; around €65 during 2025.
Small and medium-sized businesses, which represent 99% of the business sector in Spain, will be the ones who will suffer the most from this impact on their profit and loss account. For example, a small workshop with 8 employees and an annual consumption of 52,000 kWh will see an increase of €114 per month, which means an extra cost of €1,372 over the year,”
The “Social Bonus” for vunerable people, will also be affected.
Vulnerable consumers:
- 50% discount from January to March
- 42.5% from April to June
- 35% from July onwards
Severely Vulnerable Consumers:
- 65% discount from January to March
- 57.5% from April to June
- 50% from July onwards
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