Álava adapts VAT and special taxes to the state decree

The Foral Government Council of the Provincial Council of Álava approved on September 15 the Fiscal Urgent Normative Decree 4/2026, which transfers to the Alavese foral regulations the tax measures of Royal Decree-Law 18/2026, of June 29, issued within the framework of the Comprehensive Response Plan to the crisis in the Middle East. The provision is published in the Official Gazette of the Historical Territory of Álava (BOTHA) no. 109, of September 23, 2026, with the official reference 2026-02696, and enters into force the day following its publication.

The text is approved in compliance with the economic agreement with the Autonomous Community of the Basque Country, approved by Law 12/2002, of May 23, whose articles 23 quater, 26, and 33 agree upon the Tax on the Value of Electricity Production, VAT, and Excise Duties, and oblige the historical territories to apply the same substantive and formal rules as the State. The regulation is issued at the proposal of the second deputy general deputy and foral deputy of the Department of Treasury, Finance, and Budgets, following a shortened regulatory impact report from the Tax Regulatory Service, and under article 8 of Foral Norm 6/2005, of February 28, General Tax Law of Álava, and article 40 of Foral Norm 10/2023, of March 15.

Excise Duties: monthly rates conditioned on the CPI

Chapter I sets the rates for the Hydrocarbons Tax for July, August, and September 2026, with retroactive effect from July 1, and provides for automatic reductions if the National Statistics Institute confirms that the CPI of certain subclasses exceeds that of the same month of the previous year by more than 15 percent. Among the general rates, the following stand out:

• Unleaded gasoline 98 octane: 303.35 euros per 1,000 liters in July, 346.21 in August, and 389.06 in September.
• General use diesel: 185.50 euros per 1,000 liters in July, 226.00 in August, and 266.50 in September.
• General use natural gas: 1.15 euros per gigajoule for the three months.
• General use kerosene: 306.00 euros per 1,000 liters.

The partial refund of the Hydrocarbons Tax for professional use diesel is set at zero euros between July 1 and September 30, 2026. For diesel used in agriculture, horticulture, livestock, and forestry, the amounts to be refunded will be 6.93 euros for every 1,000 liters purchased in July, 25.86 euros in August, and 44.78 euros in September.

Electricity: 0.5 percent rate and minimums per megawatt-hour

Articles 4 and 5 set the rate of the Special Tax on Electricity at 0.5 percent for August and September 2026, provided that the CPI of subclass 04.5.10 Electricity exceeds that of the previous year by more than 15 percent. The quotas may not be lower than:

• 0.5 euros per megawatt-hour for industrial uses, vessels docked in port that are not private recreational craft, and rail transport.
• 1.00 euro per megawatt-hour for other uses.

Industrial uses are considered to be those carried out at high voltage or in industrial plants and facilities, as well as low voltage uses intended for agricultural irrigation.

Reduced VAT for energy, gas, and biomass

Chapter II applies a 10 percent VAT rate, during August and September 2026, to deliveries, imports, and intra-community acquisitions of electrical energy for holders of contracts with a contracted power equal to or less than 10 kW and for recipients of the social bonus with severe vulnerable status or severe vulnerable status at risk of social exclusion, in accordance with Royal Decree 897/2017, of October 6. The same reduced rate extends to natural gas, biomass briquettes and “pellets,” and firewood, in both cases conditioned on the behavior of the CPI.

Electricity production: 2026 taxable base and future rates

Article 8 determines the taxable base of the tax on the value of electricity production for 2026, with reductions of 10 percent in the first quarter, the full amount in the second, 30 percent in the third, and 40 percent in the fourth. Article 9 modifies Article 8 of Foral Norm 24/2014, of July 9, to set the rate at 3.5 percent between January 1 and December 31, 2027, and at 0 percent from January 1, 2028, with indefinite validity.

The final provisions order the entry into force on the day following its publication in the BOTHA, authorize the Provincial Council of Álava to issue the implementing regulations, and establish that the decree will be submitted to the General Assemblies of Álava for validation or revocation. The text is signed by the General Deputy, Ramiro González Vicente; the second deputy general deputy and foral deputy of Finance, Itziar Gonzalo de Zuazo; and the Director of Finance, María José Perea Urteaga.

The regulation directly affects the pockets of Alavese consumers and the energy bills of companies in the territory, as it transfers temporary VAT and special tax reductions linked to the evolution of inflation to Álava, in addition to eliminating the professional diesel refund and easing the burden of the electricity tax until 2028.

Source: Official Gazette of the Historical Territory of Álava (BOTHA), no. 109, of September 23, 2026, section I - General Assemblies of Álava and Foral Administration of the Historical Territory of Álava, page 1 (official reference: 2026-02696).