General Assemblies of Álava validate the emergency energy tax reform

The General Assemblies of Álava validated on October 14 the Fiscal Urgent Normative Decree 4/2026, of September 15, which transfers to the Alavese tax system the modifications to value-added tax, excise duties, and the tax on the value of electricity production. The validation is formalized in Foral Norm 20/2026, of October 14, published in the Official Gazette of the Historical Territory of Álava (BOTHA) number 127, of November 4, 2026, with the official reference 2026-03091.

The origin of the norm is Royal Decree-Law 18/2026, of June 29, which adopts certain measures within the framework of the Comprehensive Response Plan to the crisis in the Middle East, which introduced tax changes in those three areas. The Economic Agreement with the Autonomous Community of the Basque Country, approved by Law 12/2002, of May 23, establishes in its articles 23 quater, 26, and 33 the coordination of these taxes and obliges the institutions of the historical territories to apply the same substantive and formal rules as the State, except for exceptions. The provision incorporates those measures into the Alavese system in compliance with that mandate.

The decree was issued by the Foral Government Council under article 8 of Foral Norm 6/2005, of February 28, General Tax Law of Álava, which requires general urgent provisions to be submitted to the plenary of the General Assemblies for validation or revocation. The text was published in BOTHA number 109, of September 23, 2026 (reference 2026-02696), entering into force the day following its publication.

From the Foral Government Council to the plenary

The validating norm consists of a preamble and a single article, in which the validation of the decree is provided, and it is approved according to article 147 of Foral Norm 17/2013, of April 22, amending the Operating Regulations of the General Assemblies of Álava. The processing was as follows:

• Plenary approval session: October 14, 2026, in Vitoria-Gasteiz.
• Promulgation and publication order: Ramiro González Vicente, General Deputy.
• Signature of the foral norm: Irma Basterra Ugarriza, President of the General Assemblies of Álava.
• Decree proposal: the second deputy general deputy and foral deputy of Treasury, Finance, and Budgets, Itziar Gonzalo de Zuazo, with a report from the Tax Regulatory Service.
• Authorization for regulatory development: the Foral Deputation of Álava.

Excise duties: diesel, gasoline, and electricity

Chapter I sets monthly rates for the Hydrocarbons Tax for July, August, and September 2026. General-use diesel is taxed at 185.50 euros per 1,000 liters in July and 226.00 euros in August; if the June CPI exceeds that of the previous year by more than 15 percent, the general rate in August drops to 144.99 euros and the special rate to 34.01 euros. Gasolines, fuel oils, LPG, natural gas, kerosene, bioethanol, and biodiesel are also regulated, with differentiated general and special rates.

Regarding partial refunds, the rate applicable to professional-use diesel is set at zero euros between July 1 and September 30, 2026. For diesel used in agriculture, horticulture, livestock farming, and forestry, the refundable quotas are 6.93 euros per 1,000 liters purchased in July, 25.86 euros in August, and 44.78 euros in September.

The Special Tax on Electricity is set at 0.5 percent for August and September 2026, with minimum quotas of 0.5 euros per megawatt-hour for industrial uses, non-recreational vessels docked in port, and railways, and 1.00 euro per megawatt-hour for all other uses.

10 percent VAT for electricity, gas, and biomass

Chapter II regulates the reduced rate of Value Added Tax applicable to energy products in August and September 2026, conditional on the corresponding CPI exceeding that of the same month of the previous year by more than 15 percent. The reduction benefits:

• Holders of electricity supply contracts with a contracted power equal to or less than 10 kW.
• Recipients of the social bonus with the status of severely vulnerable or severely vulnerable at risk of social exclusion, in accordance with Royal Decree 897/2017, of October 6.
• Deliveries, imports, and intra-community acquisitions of natural gas, biomass briquettes and “pellets,” and firewood.

Electricity production: 3.5 percent in 2027 and zero from 2028

Chapter III determines the 2026 taxable base of the tax on the value of electricity production, measured at the power plant busbar, with reductions of 10 percent of the first quarter’s remuneration, the entirety of the second, 30 percent of the third, and 40 percent of the fourth, and details the calculation of quarterly fractional payments.

Additionally, Article 9 modifies Article 8 of Foral Regulation 24/2014, of July 9, on the Tax on the Value of Electricity Production: the rate will be 3.5 percent effective from January 1, 2027, and valid until December 31, 2027, and 0 percent effective from January 1, 2028, with indefinite validity.

The conclusion of the parliamentary process makes definitive certain measures that have already been in effect since July 2026 and which affect transporters, farmers and livestock breeders, domestic electricity and gas consumers, and electricity producers, who will be exempt from the tax starting in 2028.

Source: Official Gazette of the Historical Territory of Álava, no. 127, November 4, 2026, section I (General Assemblies of Álava and Foral Administration of the Historical Territory of Álava), pp. 1-2 (official reference: 2026-03091).