Royal Decree-Law 7/2026, of March 20, (Official State Gazette, March 21), which approves the Comprehensive Response Plan to the Crisis in the Middle East, establishes a series of tax measures, among which the following can be mentioned:

VAT

On an extraordinary and temporary basis until June 30, 2026, the applicable VAT rate is reduced from 21 to 10 percent:

• Electricity contracts with a fixed power term of less than 10 kW and holders of electricity supply contracts who are recipients of the social bonus and, in addition, have recognized the condition of severely vulnerable or severely vulnerable at risk of social exclusion to alleviate situations of energy poverty of the most vulnerable consumers.

• Natural gas, briquettes and pellets from biomass and firewood.

• To fuels and combustibles.

However, as these are exceptional measures, the reductions in interest rates during June 2026 are subject to the evolution of the consumer price index for the products affected.

Personal Income Tax

Effective from 1 January 2025

• The deductions for improving the energy efficiency of homes through works to reduce the demand for heating and cooling and through works to improve the consumption of non-renewable primary energy are extended until December 31, 2026.

• The deduction for improving the energy efficiency of homes through works carried out in buildings with predominantly residential use is extended until December 31, 2027.

Effective from 1 January 2026

• The deduction for the acquisition of plug-in electric vehicles and fuel cell vehicles and the installation of charging points is extended until December 31, 2026.

• A new deduction is created for the installation during 2026 of self-consumption systems of electrical energy that use energy from renewable sources in properties and buildings of predominantly residential use.

CORPORATION TAX

With effect for tax periods that, starting on or after 1 January 2025, have not ended by 22 March 2026:

• The freedom of amortization for investments that use energy from renewable sources is extended to the 2026 financial year.

• The freedom of amortization for investments in certain vehicles and new charging infrastructure is extended to the 2026 financial year.

TAX ON HYDROCARBONS AND EXTRAORDINARY AND TEMPORARY AID TO AGRICULTURAL PRODUCERS AND TRANSPORTERS

Effective from March 22 to June 30, 2026, the tax rates for the hydrocarbon tax applicable to fuels and lubricants (Article 38) and the rate of refund for professional diesel (Article 39) are reduced. In addition, extraordinary and temporary aid is approved to cover the price of diesel consumed by agricultural producers (article 46), by vehicle owners entitled to a partial refund of the Hydrocarbons Tax for professional diesel (article 55) and by land transport professionals with respect to vehicles that cannot benefit from the aforementioned partial refund (article 58).

SPECIAL ELECTRICITY TAX

Effective from March 22 to June 30, 2026, the tax rate of the Special Tax on Electricity (Article 40) is reduced from 5.11269632 percent to 0.5 percent.

TAX ON THE VALUE OF ELECTRIC POWER PRODUCTION

Effective from March 22, and until June 30, 2026, reductions are introduced in the determination of the taxable base of the Tax on the Value of Electricity Production (Article 41) corresponding to the year 2026 in order to compensate for the higher costs borne by the companies that determine the price of electricity in the wholesale market, due to the increased cost of energy products, and so that they can offer more competitive prices that benefit consumers:

• A 10 percent reduction in the remuneration corresponding to the electricity incorporated into the system during the first calendar quarter of 2026, which means that 90 percent of said remuneration will be included in the taxable base of the tax.

• A reduction in the total remuneration corresponding to the electricity incorporated into the system during the second calendar quarter of 2026, which means that said remuneration will not be included in the taxable base of the tax.