Electricity VAT will change from December 1st, with the introduction of the intermediate VAT rate on certain components of the invoice for consumers with contracted power up to 6,9 kVa in both the regulated and the liberalized markets.
The Energy Services Regulatory Authority (ERSE) has prepared a guide on changes in VAT.
1- Who can benefit from the reduced VAT rate on the electricity bill?
Customers with contracted power up to 3,45 kVA can benefit from the reduced VAT rate. The reduced VAT rate is only applicable to a part of the total invoice amount, namely the fixed term (power) of the network access charges. The fixed component of the network access tariff is approved by ERSE.
2- Who can benefit from the intermediate VAT rate on the electricity bill?
Customers with contracted power up to 6,9 kVA can benefit from the intermediate VAT rate, in the part of consumption that does not exceed 100 kWh. In the case of a large family (5 or more elements), the intermediate VAT rate is applicable for the part of consumption that does not exceed 150 kWh. In both situations, the consumption thresholds consider a period of 30 days.
3 - Who is responsible for applying VAT?
The supplier is responsible for billing electricity consumption. Invoices must identify the different components invoiced and the respective VAT rates. The rules for applying VAT rates are the same for all consumers, whether they are still in the regulated market or are already in the liberalized market, which are the majority.
4 - In the invoice with a billing period greater than or less than 30 days, how are the consumption thresholds calculated for the application of the intermediate VAT rate?
The consumption thresholds of 100 kWh or 150 kWh are a reference value for a period of 30 days.
Thus, in order to determine the consumption threshold for electricity supply in periods of less than or greater than 30 days, the number of days billed should be considered. In other words, the calculation of the consumption value for applying the threshold is calculated as follows: (number of days billed / 30) x 100 kWh or 150 kWh (depending on the case). The electricity supplier may round the thresholds to the nearest unit after calculation.
Example: In an invoice with consumption in the 42-day period, in which the applicable consumption threshold is 100 kWh, the consumption to which the intermediate rate applies will be calculated as follows: (42/30) x 100 kWh = 140 kWh.
5 - How can I apply for large family status (effective March 2021)?
In order to benefit from the application of the intermediate VAT rate on the part of consumption that does not exceed 150 kWh, the contract holder must submit a written request to his supplier in the model approved by Decree No. 247-A / 2020 October 19, accompanied by one of the following documents:
a) Declaration of IRS referring to the most recent current year, demonstrably submitted and validated
(if the Claimant is married or de facto married, both statements from the
IRS, unless you have opted for joint taxation); or
b) Municipal Large Family Card; or
c) Declaration by the Parish Council proving the household; or
d) Last water supply invoice in the name of the holder of the energy contract, stating the
application of the family water tariff.
Proof of the condition of a large family is valid for two years from the date of commencement.
6 - If I change my supplier, how do I prove my large family status?
In the event of a change, the contract holder can prove the status of a large family with the new supplier, by presenting the last invoice (from the previous supplier) issued on the date of change of the supplier. If you wish, you can make a new written request, accompanied by the documents indicated above.