November begins without the VAT reduction on electricity that the Government had planned to ease the rising cost of energy. The Executive approved last September 29 a mechanism that allows reducing the 21% to 10% Value Added Tax (VAT) applied to certain electricity and natural gas supplies, but this measure does not come into force automatically. To activate it, it is necessary for the prices of each supply to have increased by more than 15% compared with the same month of the previous year.
The requirement is set out in Royal Decree-Law 25/2026, of September 29, approved within the Comprehensive Response Plan to the Crisis in the Middle East and ratified by the Permanent Deputation of Congress on October 16. The regulation establishes two possible application periods: November and December, although each one depends on a different inflation figure.
In the case of electricity, the condition for November has not been met. According to the final data from the National Institute of Statistics (INE), published on October 14, the price of electricity recorded in September a year-on-year increase of 11.4%, below the legal threshold of 15%. Therefore, the electricity bill generally maintains the 21% VAT, while the Special Electricity Tax continues at its ordinary rate.
What has to happen for the VAT on electricity to fall to 10%
The mechanism approved by the Government establishes a specific condition: the CPI for electricity must exceed by more than 15% that recorded in the same month of the previous year. It is not enough for a consumer’s bill to have risen or for the wholesale price of energy to increase for a few days.
To determine whether the reduction corresponded to be applied in November, the regulation takes as a reference the evolution of the CPI for electricity between September 2025 and September 2026. As the increase stands at 11.4%, the condition has not been reached.
The difference is relevant because the general CPI for September was 4.9%, but this indicator also does not directly determine the application of the measure. The law expressly refers to the specific electricity index published by the INE.
If the threshold had been exceeded, the reduced 10% VAT would have benefited holders of electricity contracts with a contracted power equal to or less than 10 kilowatts (kW), regardless of whether they were under a regulated tariff or the free market.
The rule also includes the beneficiaries of the social electricity bonus who have recognized the condition of severely vulnerable consumers or severely vulnerable consumers at risk of social exclusion, even when their contracted power exceeds the established general limit.
However, since the mechanism was not activated in November, these requirements do not on their own generate a reduction in VAT. The discounts specific to the social bonus are a different measure and follow their corresponding conditions.
What happens with the VAT on natural gas in November
Natural gas has a VAT reduction clause equivalent to that of electricity, but it is checked independently. Article 18 of Royal Decree-Law 25/2026 establishes that the tax may go from 21% to 10% if the specific CPI for natural gas in September 2026 exceeds by more than 15% the level recorded in September 2025.
Therefore, the rise in electricity does not determine the VAT on gas, nor vice versa. Each product has its own indicator and must separately meet the requirement established by law.
The measure also includes, under the condition linked to the CPI of natural gas, briquettes and pellets from biomass and wood intended for firewood, products especially relevant for numerous households during the winter months.
In its October economic report, the Bank of Spain did not contemplate the activation of the tax cuts for electricity, gas and firewood. Consequently, it should not be taken for granted that these supplies will enjoy a VAT of 10% simply because the Government has approved the possibility of applying it.
In addition, the Executive has introduced other measures to contain the impact of the gas increase, especially on the Last Resort Tariff (TUR). However, limiting or postponing the increase of a regulated tariff is different from reducing VAT, since both decisions affect different concepts on the bill.
The Special Tax on Electricity also does not fall to 0.5%
VAT is not the only tax that can influence the electricity bill. The Royal Decree-Law also contemplates reducing the Special Tax on Electricity from 5.11269632% to 0.5% during November and December, provided the same inflation requirement is met.
Specifically, for November it is required that the electric CPI for September have risen more than 15% year-on-year. As the increase was 11.4%, this second tax cut also does not apply.
The Tax Agency confirms that the rate corresponding to November remains 5.11269632%, while the possible reduction in December will depend on the CPI for October.
In the event that the tax were reduced to 0.5%, the regulations require that certain minimum tax rates be respected. For domestic uses, the charge cannot be less than one euro per megawatt hour (MWh), while certain professional uses have a minimum of 0.5 euros per MWh.
The simultaneous application of a lower VAT and a lower electricity tax could reduce the total amount paid by consumers, although the savings would depend on consumption and the components included in the bill.
How much could a household save if VAT went from 21% to 10%
The VAT cut can translate into immediate savings as long as the price before taxes remains stable. For every 100 euros of taxable base, the consumer currently pays 21 euros of VAT. With a reduced rate of 10%, that amount would be 10 euros.
Thus, a supply with a taxable base of 100 euros would go from costing 121 euros to 110 euros, which represents a saving of 11 euros, equivalent to approximately 9.1% of the previous amount.
For example, for a taxable base of 60 euros, the cost with a VAT of 21% would be 72.60 euros. If a VAT of 10% were applied, it would be reduced to 66 euros, with a saving of 6.60 euros.
These calculations are theoretical examples, since the actual bill may include items with different tax treatments. In addition, a reduction in the tax does not guarantee that the final amount will decrease if during the same period the price of energy or consumption increases.
The Organization of Consumers and Users (OCU) has pointed out that the electricity bill of an average household under the Voluntary Price for the Small Consumer (PVPC) reached 92.44 euros in October, 7.2% more than in September and 28% above the same month of 2025. These data reflect that the evolution of prices can have a considerable impact even without tax changes.
Will VAT on electricity and gas be lowered in December?
The possibility of recovering the tax cuts remains open for December 2026. However, this time the October inflation data, which the INE will publish definitively in mid-November, will be used.
The mechanism will be identical to the one applied this month: if the CPI for electricity in October exceeds by more than 15% that recorded in October 2025, VAT may be reduced to 10% during December for electrical supplies that meet the legal requirements.
In that same case, the Special Tax on Electricity would also be reduced to 0.5%, respecting the established minimums. For its part, natural gas must meet its own inflation threshold to benefit from reduced VAT.
Therefore, the fact that the electricity discount was not activated in November does not prevent it from being applied during December. Both decisions respond to different reference periods and do not depend on an automatic extension of the previous conditions.
How to know what VAT you are being charged on the bill
Consumers can check the tax rate applied directly on the bill from their electricity or gas company. The bill must identify the taxable base, the corresponding VAT percentage, and the amount of the tax, so that the user can verify how much it represents within the total.
On the electricity bill, the Special Tax on Electricity also appears, which taxes certain components of the supply and is calculated before applying the corresponding VAT.
When a bill includes consumption from periods with different tax rates, the application of the regulations may depend on the tax rules on the accrual of the supply, so it should not be assumed that all bills issued in a month necessarily have the same treatment.
If the consumer believes that an incorrect percentage has been applied, they may request clarification from their supplier and, if appropriate, file a complaint.
What measures remain in force to ease the energy bill
Although the tax cuts are not activated in November for electricity, vulnerable consumers can continue to benefit from the specific aid provided in the electricity social bonus.
During 2026, the extraordinary discounts of 42.5% for vulnerable consumers and 57.5% for severely vulnerable consumers remain in place, applicable to the concepts and limits established by the social bonus regulations.
Protective measures against supply cuts also continue for households that meet the legal requirements. These mechanisms are independent of the VAT changes and do not require energy inflation to exceed 15%.
In the case of gas, the Government has also approved measures aimed at temporarily containing the increase in the regulated TUR tariff, although the OCU warns that part of the price increase is deferred and could be passed on to later reviews.
In short, November 2026 begins without a general VAT reduction on electricity, which remains at 21% because September’s electricity inflation did not reach the required threshold. The regulations keep open a new opportunity for December, but its application will depend exclusively on the official October data and on the fulfillment of the specific conditions for each supply.