APPROVED: Spain reduces VAT on gas bills

The Local
The Local - [email protected] • 21 Sep, 2022 Updated Wed 21 Sep 2022 08:04 CEST
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The Spanish government on Tuesday approved the reduction of VAT on gas and other heating products from 21 percent to 5 percent, a measure which will come into force in October and last until December 31st.


The Spanish Cabinet on Tuesday approved a new cost-cutting measure which aims to decrease the amount both residents and small businesses will pay on their gas bills this coming winter.

The VAT cut will also apply to other items used for heating such as pellets, briquets and wood as the price of said biofuel products has also increased considerably in the lead-up to the winter months. 

Bottled butane gas has not been included in the new measure, but its price have been frozen at €19.55 per canister.


The reduction will mean monthly savings for an average user of between €5 and €19, depending on how much they use and the type of contract they have, according to consumer associations.

Overall, the Spanish government estimates the move will represent a save of €210 million for the Spanish population. 

READ ALSO: How much will Spain’s gas VAT cut save me per month?

The Organisation of Consumers and Users (OCU) estimates that heating an average home, using 9,000 kWh per year on the cheapest free market rate could save €227 per year. For those on the regulated market rate, the savings would be reduced to less than half – €103 per year.

The tax reduction on gas comes more than a year after the government reduced the VAT on electricity bills from 21 percent to 10 percent. This was followed by a further reduction from 10 to five percent in June 2022.

It is estimated that the plan will cost the government between €190 and €200 million during the three months it will be in force, according to Spain’s Ministry of Finance.  

The move is part of a raft of measures the Spanish government has put in place aimed to help those in Spain make it through tough economic times caused by inflation and soaring energy prices. 

In addition to the VAT cut on gas bills, the government has offered free train tickets, cut VAT on electricity bills, and limited the amount by which landlords can increase rent.



The Local 2022/09/21 08:04

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