Villafranca de la Sierra imposes a 1.5% tax on supply companies

The City Council of Villafranca de la Sierra has finalized the fiscal ordinance that levies a rate of 1.5% on companies operating supply services for the private use or special exploitation of the soil, subsoil, or airspace of municipal public roads. The approval is published in the Official Gazette of the Province of Ávila, number 173, dated September 8, 2026, under file number 1780/26.

As no claims were filed during the public exhibition period, the provisional plenary agreement was automatically finalized. The full text is made public in compliance with Article 17.4 of the Recast Text of the Law Regulating Local Treasuries, approved by Royal Legislative Decree 2/2004, of March 5.

Taxable Event and Taxpayers

The tax applies to the private use or special exploitation of the local public domain by companies providing supply services of general interest or those affecting the general public or a significant part of the neighborhood. The following services are included:

• Water supply
• Gas supply
• Electricity supply
• Fixed telephony and other analogous services
• Mobile telephony is expressly excluded

Taxpayers are all natural or legal persons who own the operating companies, whether they own the networks through which the supply is carried out or hold rights of use, access, or interconnection to them. Distribution and marketing companies are also included.

Tax Base, Accrual, and Settlement

The tax base consists of the gross income of the companies, determined in accordance with Article 24.1.c) of Royal Legislative Decree 2/2004, and the rate of 1.5% is applied to it. The tax accrues when the use of the public domain begins and, if the exploitation extends over several fiscal years, accrual takes place on January 1 of each year.

A self-assessment regime is established. Companies must submit to the City Council, before April 30 of each year, the settlement corresponding to the gross income invoiced in the immediately preceding fiscal year. Payment shall be made by bank transfer, and companies using third-party networks must certify the amount paid for access or interconnection to justify the reduction of their income.

Legal Framework and Entry into Force

The ordinance was approved by the Plenary of the City Council in a session held on June 16, 2026, and will enter into force on the day of its publication in the provincial bulletin, becoming applicable as of the following day. Regarding infractions and sanctions, reference is made to Law 58/2003, of December 17, General Tax Law, and for matters not provided for, to local and state local treasury regulations.

Against the agreement, interested parties may file a contentious-administrative appeal within two months from publication, before the High Court of Justice of Castilla y León. The announcement is signed on August 31, 2026, by the mayor, Francisco López Pérez.

The measure represents a new source of income for a small municipality, while transferring the cost of the use of the local public domain to the supply companies, in line with the authorization that local treasury legislation grants to city councils.

Source: Official Bulletin of the Province of Ávila, no. 173, September 8, 2026, Local Administration section (official reference: number 1780/26).