Main developments regarding the Special Tax on Electricity pursuant to Article 40 of Royal Decree-Law 7/2026, of March 20, which approves the Comprehensive Response Plan to the Crisis in the Middle East

 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, hereinafter Royal Decree-Law 7/2026, establishes, 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, which goes from 5.11269632 percent to 0.5 percent.

As a consequence of this reduction, 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.

This tax rate reduction has effect from March 22, 2026, the date of entry into force of Royal Decree-Law 7/2026, and is valid until June 30, 2026.

However, as these are exceptional measures, this reduction during the month of June 2026 is subject to the evolution of the electricity consumer price index.

Therefore, during the validity of this measure, section 1 of article 99 of Law 38/1992, of December 28, on Special Taxes, provides that “1. Without prejudice to the provisions of paragraph 2 of this article, the tax shall be levied at a rate of 0.5 percent…”.

To make the application of this measure possible, a self-assessment form 560 will be made available to taxpayers on the Electronic Headquarters of the State Tax Administration Agency, which will allow them to distinguish between the applicable tax rate for supplies or consumption accruing before the entry into force of the aforementioned Royal Decree-Law (5.11269632 percent) and the applicable tax rate for supplies or consumption accruing after that date (0.5 percent).

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

This tax rate reduction has effect from March 22, 2026, the date of entry into force of Royal Decree-Law 7/2026 and is valid until June 30, 2026.

However, as these are exceptional measures, this reduction during the month of June 2026 is subject to the evolution of the electricity consumer price index.