The Government rules out lowering the VAT on butane and trusts the fixed price cap


It will not follow the steps of the electricity bill. The Government has ruled out a VAT reduction on butane and propane gas cylinders from 21% to 5%, according to the discount recently approved for gas, and trusts that the ceiling price set by a recent decree law is sufficient to avoid uncontrolled rises.

In a response registered in Congress and collected by Europa Press, the Executive explains that it is a European directive that provides that Member States may apply a maximum of two reduced rates of no less than 5% and will apply only to deliveries of goods and provision of expressly related services.

“These categories do not include liquefied petroleum gases to which a reduced rate of tax can be applied”, argues the Government, indicating that this is why “a reduction in the VAT rate for butane and propane gas cylinders is not possible”.

However, in its response, the Executive recalls that through the measures deployed to respond to the economic and social consequences of the war in Ukraine A limitation was established on the maximum sale price, before taxes, of bottled liquefied petroleum gases. Specifically, the maximum price of the 12.5-kilogram butane cylinder was set at 19.55 euros, in application of Royal Decree Law 11/2022. The plenary session of Congress endorsed last Thursday the decree law approved by the Government to, among other measures, lower until December 31 the VAT applied to the gas bill from 21% to 5%.

Rule out lowering VAT on butane

The decree was backed by el PSOE, PP, United We Can, Republican Left, Citizens, the PNV, the PDeCAT, Canarian Coalition, Más País-Equo, Compromís, Foro Asturias, the PRC and Teruel Exists. Of course, he did not have the support of Vox, EH-Bildu, Junts, the CUP and the BNG, who preferred to abstain.

In addition to the tax cut, the decree law allows industrial cogeneration plants to take advantage of the compensation provided for combined cycles for the ‘cap on gas’, the recovery of interruptibility and measures to facilitate the generation of renewable energy, by making the criteria for determining capacity more flexible transport and simplify administrative procedures.


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