The Tax on the Value of Electricity Production is an environmental, direct and real tax levied on the activities of electricity production and supply.
Following the suspension of the tax from the third quarter of 2021 to 2023, through Royal Decree-Law 8/2023 of 27 December, the Council of Ministers agreed to its progressive reactivation for 2024.
The IVPEE is a direct tax levied on the activities of the production and incorporation into the electricity system of electrical energy for each installation located in Spanish territory, during the tax period of the calendar year.
For the 2024 tax year, companies or persons owning installations that generate or distribute electrical energy must self-assess the tax, taking into account the following specifities:
TAXABLE BASE:
- The tax base of this levy is the value of the production of electrical energy, equivalent to the total amount that the taxpayer is entitled to receive for the production and incorporation into the electricity system of electrical energy, for each installation, minus half of the remuneration corresponding to the electricity incorporated into the system during the first calendar quarter, and minus a quarter of the remuneration corresponding to the electricity incorporated into the system during the second calendar quarter.
TAX RATE:
- The tax rate of 7% is upheld.
PAYMENT BY INSTALMENT:
- Payment by instalment for the 1st quarter (to be submitted between 1-20 May 2024): this amount is the result of applying the tax rate to the value of the electrical energy production during the first 3 months of the year, reduced by half of the stated remunerations.
- Payment by instalments for the 2nd quarter (to be submitted between 1-20 September 2024): this is calculated on the basis of the value of electrical energy production in the first 6 months of the year, minus half of the remuneration for the first quarter and a quarter of the remuneration for the second quarter. After applying the tax rate, the amount paid for the 1st quarter instalment is deducted.
- Payment by instalment for the 3rd and 4th quarter (to be submitted between 1-20 November 2024 and 1-20 February 2025, respectively): the payment by instalment will be calculated based on the value of energy production from the beginning of the year until the end of the quarter (9 months in the case of the 3rd quarter and 12 months in the case of the 4th quarter). In both cases, half of the remunerations of the first quarter and a quarter of the remunerations of the second quarter must be deducted. After applying the tax rate, the amount of the instalments previously paid is deducted.
If the value of electrical energy production, including all installations, has not exceeded €500,000 in the immediately preceding calendar year, a one-off payment must be made during the first 20 calendar days of November, based on the value of electrical energy production over the first 9 months of the calendar year.
ANNUAL ASSESSMENT:
- As regards formal obligations, the taxpayer is obliged to file an annual self-assessment (form 583) in November of the following year and an informative return (form 591) between 1 and 20 December of the following year. In the case of ceasing the activity before 31 October, the tax is assessed using form 588.
SUMMARY TABLE:
| General Case | Deadline | Tax Base | Rate | Tax Payable |
| Instalment 1st Quarter | 1-20 May 2024 | Half of the remuneration corresponding to the period January to March 2024. | 7% | Result of applying the tax rate to the tax base. |
| Instalment 2nd Quarter | 1-20 September 2024 | Remuneration for the period January to June 2024, reduced by ½ of the amount of the 1st quarter and by ¼ of the amount received in the 2nd quarter. | 7% | After applying the tax rate to the tax base, the amount of the 1st quarter instalment payment is deducted. |
| Instalment 3rd Quarter | 1-20 November 2024 | Remuneration for the period January to September 2024, reduced by ½ of the amount of the 1st quarter and by ¼ of the amount received in the 2nd quarter. | 7% | After applying the tax rate to the tax base, the 1st and 2nd quarter instalments are deducted. |
| Instalment 4th Quarter | 1-20 February 2025 | Remuneration for the period January to December 2024, reduced by ½ of the amount of the 1st quarter and by ¼ of the amount received in the 2nd quarter. | 7% | After applying the tax rate to the tax base, the instalments for the 1st, 2nd and 3rd quarters are deducted. |
| Special case: Electrical Energy Production of the previous year is less than 500,000€. | ||||
| Single Payment | 1-20 November 2024 | Remuneration for the period of January to September 2024, reduced by ½ of the amount of the 1st quarter and by ¼ of the amount received in the 2nd quarter. | 7% | Result of applying the tax rate to the tax base. |
| Deadline | Tax Base | Rate | Tax Payable | |
| Annual Self-Settlement | 1-30 November 2025 | Remuneration corresponding to the period of January to December 2024, reduced by ½ of the amount for the 1st quarter and ¼ of the amount for the 2nd quarter. | 7% | After applying the tax rate to the tax base, instalments, if any, are deducted. |
| Annual Informative Return | 1-20 December 2025 | To declare the remuneration received for electricity incorporated into the transmission and distribution system of the electricity system during 2024. | ||
