Portugal – Regulation of VAT rates in electricity supplies

In line with the provisions of Article 2 of Decree-Law No. 74/2020 of September 24^th, Ordinance No. 247-A/2020, of October 19^th, 2020, was now published, regulating the application of Item 2.8 of Schedule II attached to the VAT Code.

According to this Ordinance, Item 2.8 applies to the supply of electricity for normal low voltage consumption (BTN), whose contract is based on a predetermined power step not exceeding 6.90 kVA, regardless of the number of installations associated with each contract.

This Ordinance also clarifies that Item 2.8 does not include:

a) the consumption of electricity by provisional installations or eventual installations, thus considered in accordance with the applicable regulations;

b) the production, distribution, and self-consumption of electricity;

c) the supply of electricity for consumption whose contract is based on an undetermined power or when there is no contracted power, namely supply of electricity:

• For public lighting;
• For charging electric vehicles at a charging station;

d) the fixed component of the tariff for access to the networks and the other components relating to power contracted that do not depend on the quantity of kWh consumed;

e) the rates and taxes on electricity, namely the Excise Duty, the Audiovisual Contribution, and the levy of Directorate General of Energy and Geology.

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