Tax measures to combat the energy crisis resulting from the armed conflict in the Middle East: Reduction of the tax rate of the Special Tax on Electricity

In order to address the most immediate consequences of the conflict in the Middle East and mitigate the effects of rising electricity prices, Article 40 of Royal Decree-Law 7/2026, of March 20, which approves the Comprehensive Response Plan to the Middle East Crisis, established, on an exceptional and temporary basis, a reduction of the tax rate of the Special Tax on Electricity provided for in section 1 of article 99 of Law 38/1992, of December 28, on Special Taxes, going from 5.11269632 percent to 0.5 percent.

Because these were exceptional measures, this reduction during the month of June 2026 was subject to the condition that in the month of April the variation of the CPI of electricity exceeded by more than 15 percent the CPI of the same month of the previous year.

Since this circumstance did not occur, the reduced rate of the Special Tax on Electricity has not been applied to the accruals produced from June 1, 2026 onwards, and the rate of 5.11269632 percent is applicable to them from that date.

Additionally, section a) of article 42 of Royal Decree-Law 7/2026 reduced the VAT tax rate applicable to certain deliveries, imports and intra-community acquisitions of electricity from 21 percent to 10 percent.

Considering it necessary to maintain on a temporary basis certain measures included in Royal Decree-Law 7/2026, of March 20, including those relating to the Special Tax on Electricity, articulating their progressive withdrawal as the stabilization of energy markets is consolidated and the risks associated with the current geopolitical situation decrease, Royal Decree-Law 18/2026, of June 29, has been approved, adopting certain measures within the framework of the Comprehensive Response Plan to the Crisis in the Middle East.

Articles 12 and 13 of the aforementioned Royal Decree-Law 18/2026, of June 29, establish that the tax rate of the Special Tax on Electricity provided for in section 1 of article 99 of Law 38/1992, of December 28, on Special Taxes, may be reduced in the August and September of 2026 of 5.11269632 percent at 0.5 percent.

The reduction in the tax rate in August 2026 will apply if, in June 2026, the electricity CPI exceeds the CPI of the same month of the previous year by more than 15 percent, according to the information published in July by the National Institute of Statistics.

The reduction in the tax rate in September 2026 will apply if, in July 2026, the electricity CPI exceeds the CPI of the same month of the previous year by more than 15 percent, according to the information published in July by the National Institute of Statistics.

If the aforementioned reductions are applied, the minimum tax levels may not be less than 0.5 euros per megawatt-hour if the electricity is used for professional purposes, or 1 euro per megawatt-hour in all other cases, in accordance with the provisions of Council Directive 2003/96/EC of 27 October 2003.

Additionally, Articles 10 and 11 of Royal Decree-Law 18/2026, of June 29, establish, for the months of August and September 2026, reductions in the VAT tax rate on certain deliveries, imports and intra-community acquisitions of electricity that may be applied according to the CPI of electricity.