New developments in indirect taxation and environmental taxation for 2024: Spanish Royal Decree-Law 8/2023

On December 28, 2023, Spanish Royal Decree-Law 8/2023, of December 27, 2023, was published in the Official State Gazette, adopting measures to face the economic and social consequences derived from the conflicts in Ukraine and the Middle East, as well as to alleviate the effects of the drought (RD-l 8/2023), among which, we highlight the following in relation to Value Added Tax, Excise Duty on Electricity and Tax on the Value of the Production of Electric Energy:

Value Added Tax (VAT)

- Until June 30, 2024, a tax rate of 5% will be applied to deliveries, imports and intra-community acquisitions of olive oils and seed oils, as well as pasta.

- Until June 30, 2024, a 0% tax rate will be applied to supplies, imports and intra-Community acquisitions of basic food products such as bread, flour, milk, cheese, eggs, fruit and vegetables.

- Until December 31, 2024, the tax rate of 10% will be applied to deliveries, imports and intra-Community acquisitions of electrical energy supplied under supply contracts with contracted power less than or equal to 10kW (when the average daily market price of the month prior to the billing month has exceeded 45 euros/MWh).

- Until March 31, 2024, the tax rate of 10% will be applied to deliveries, imports and intra-community acquisitions of natural gas.

- Until June 30, 2024, the tax rate of 10% will be applied to deliveries, imports and intra-community acquisitions of briquettes and pellets from biomass and wood for firewood.

 

Excise Duty on Electricity (IEE)

 - Until March 31, 2024, a tax rate of 2.5% will be applied to the supply and self-consumption of electricity.

- From April 1, 2024 to June 30, 2024, a tax rate of 3.8% will be applied to the supply and self-consumption of electricity.

The above reductions will not apply to those taxpayers whose taxable base has been reduced by 85% for using electricity for chemical and electrolytic reduction processes, mineralogical, metallurgical, as well as industrial activities whose electricity costs represent more than 50% of the cost of a product.

 

Tax on the Value of Electricity Production (IVPEE)

With effect from January 1, 2024, the IVPEE is reactivated, the taxable base of which will be constituted by the total amount corresponding to the taxpayer for the production and incorporation to the electricity system, measured in plant bars, for each installation, in the tax period, minus half of the remunerations corresponding to the electricity incorporated to the system during the first calendar quarter, and minus a quarter of the remunerations corresponding to the electricity incorporated to the system during the second calendar quarter.

For the purposes of the installment payments of the tax, the following must be taken into account:

The installment payment for the first quarter will be calculated based on half of the value of the production of electric energy incorporated into the electricity system from the beginning of the tax period until the end of the first three months of the year, applying the tax rate of 7%.

The installment payment for the second quarter will be calculated based on the value of the electricity production incorporated into the electricity system from the beginning of the tax period until the end of the first six months of the year, reduced by half of the amount of the remuneration corresponding to the electricity incorporated into the system during the first calendar quarter and by a quarter of the amount of the remuneration corresponding to the electricity incorporated into the system during the second calendar quarter, applying the tax rate of 7%.

The installment payments for the third and fourth quarters will be calculated based on the value of the electricity production incorporated into the electricity system from the beginning of the tax period until the end, respectively, of the nine or twelve months of the year, reducing by half the amount of the remuneration corresponding to the electricity incorporated into the system during the first calendar quarter and by a quarter of the amount of the remuneration corresponding to the electricity incorporated into the system during the second calendar quarter, applying the tax rate of 7%.

 

How can we assist you?

Salinas & Partners, with more than 30 years of experience in indirect and environmental taxation, is at your disposal to assist you in the management and implementation of the measures described in this informative note.

 

 

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