The Value Added Tax (VAT) is a tax applied to most goods and services, including electricity, generally levied at 21%. However, due to the energy crisis, temporary measures were implemented to reduce this tax. This crisis, triggered by factors such as the post-pandemic economic recovery and geopolitical tensions, caused a global energy shortage, leading to significant increases in electricity and gas prices.
With the energy landscape showing signs of stabilization, authorities have decided to gradually reverse these extraordinary measures. As of January 1, 2024, the VAT on electricity has increased from 5% to 10%. This rate will return to the usual 21% on March 1, 2024. It's important to understand that this change not only affects the VAT on electricity but also includes increases in other energy-related taxes, such as the Special Electricity Tax (IEE) and the Tax on Electricity Production (IVPEE).
This increase in VAT and other related taxes will inevitably result in a higher total cost on energy bills. It is estimated that, on average, bills could rise by 7 to 10 euros. Consumers must be aware of these changes and seek options to mitigate the impact on their budgets. This can include reviewing available energy rates and bills and adopting measures to optimize energy consumption at home or in the workplace.
At RwC Energy Partners, we recommend conducting a thorough analysis of your energy needs and selecting the most suitable tariff to meet them. Choose one that allows you to enjoy a comfortable environment without constant concern over energy consumption. This choice is especially important during winter, as it is the time when we typically use devices like heat pumps or electric heaters more frequently. In our corporate commitment, we understand the importance of ensuring an efficient and sustainable energy supply for our clients.Therefore, we encourage you to make informed decisions that benefit both your business and your home.
RWC ENERGY PARTNERS