Employing Foral Decree No. 3/2020, a series of modifications were established for the Value Added Taxes and the Valor de la Producción de la Energía Eléctrica – VPEE (Value of the Production of Electric Energy).
1. Applicable Tax Rate
The regulation states that, as the effective date from June 26, 2021, in force until December 31, 2021, the 10 percent Value Added Tax rate will be applied to deliveries, imports, and intra-Community acquisitions of electric energy made in favor of:
- Owners of electricity supply contracts, whose contracted power (fixed power term) is less than or equal to 10 kW, regardless of the voltage level of the supply and the type of contract when the arithmetic average price of the daily market corresponding to the last calendar month prior to the last day of the billing period has exceeded 45 €/MWh.
- Owners of electricity supply contracts who are recipients of the electricity rates subsidy and have been recognized as severely vulnerable or severely vulnerable at risk of social exclusion under the provisions of Royal Decree 897/2017, October 6, regulating the figure of the vulnerable consumer, the rates subsidy and other protection measures for domestic electricity consumers.
2. Determination of Taxable Income
For the 2021 tax year, the taxable base of the tax on the value of electricity production will be made up of the total amount that the taxpayer is entitled to receive for the production and incorporation into the electricity system of electricity measured at power plant busbars, for each installation in the tax period, minus the remuneration corresponding to the electricity incorporated into the system during the third calendar quarter.
In this regard, the installment payments for the third quarter will be calculated based on the value of the production of electrical energy at power plant busbars carried out during the tax period minus the remuneration corresponding to the electricity incorporated into the system during said quarter, applying the tax rate provided for in section eight of article one of the Foral Law 11/2015, March 18, regulating the Tax on the Value of the Production of Electrical Energy, the Tax on Fluorinated Greenhouse Gases and the Tax on Deposits in Credit Institutions, and deducting the amount of the installment payments previously made.
Finally, the installment payments for the fourth quarter will be calculated based on the value of the production of electricity at busbars made during the tax period less the remuneration corresponding to the electricity incorporated into the system during the third calendar quarter, applying the tax rate set forth in the preceding paragraph, and deducting the amount of the payments previously made.