The drop in the price of electricity that has been recorded throughout the month of February, especially in recent days, is good news for domestic consumers with contracts in the regulated market but it could also be the reason for an increase immediate VAT on electricity that was not planned until January 2025. If the average price in February exceeds 45 euros/MWh, this tax will rise from the current 10% to 21%, according to a reservation that appeared in the decree at the end of last year that contemplated a first increase, from 5% to 10 %. If on February 27, the average is below, at 42.3 euros/Mwh, and points to a VAT increase to 21% in March that will affect all consumers, also those who have contracts in the free market, which has led the electricity sector to protest against what it considers a tax “lottery.”

The origin of this possible new increase in the VAT on electricity, which the sector already sees as “very probable”, is the decree-law on measures to face the consequences of the war in Ukraine that the Government approved on December 27, and which contemplated a progressive increase in energy-related taxes, which had been reduced to a minimum to be able to face the price crisis of 2022.

As the president, Pedro Sánchez, announced at a press conference, in January 2024, VAT on gas and electricity would go from the super-reduced rate of 5% to the reduced rate of 10%.. The gas rate would return to the ordinary rate of 21% in April, at the end of the winter season, while the electricity rate would remain at 10% throughout 2024 and would not rise to 21% until January 2025.

However, there was a caveat, the extraordinary measure of maintaining the VAT on electricity at 10% and not at the ordinary rate of 21% would not be met “when the arithmetic average price of the daily market corresponding to the last calendar month preceding that of the last day of the billing period has exceeded 45 euros/MWh”.

This phrase applied to any contracted power and any “contracting modality” and its effects are about to be verified, unless this Wednesday the price of electricity experiences an increase that affects the entire average for the month which, on the 27th , stands at 42.3 euros MW/h, that is, below the threshold from which VAT will once again be 21%. From there, the VAT will not necessarily remain at 21% because if the price of electricity rises again to exceed the average of 45 euros/Mwh per month, then it will go back down to 10%, until it eventually returns. to fall below that average amount.

Given this almost certain increase in electricity in the month of March and a possible fluctuation in the VAT on electricity throughout the year – in 2025 it will already rise to 21% without conditions -, the Government has highlighted as a “positive argument” that this foreseeable increase in VAT is due to a drop in the price of electricity, thanks to the fact that the winter has been less cold and also to the penetration of renewables, which has ruled out taking any measure to avoid the increase next month .

“The measures that were designed with conditions associated with the evolution of prices, the urgency of inflation in energy matters, have to continue their course and will continue to do so if the situation arises in the following months,” declared the Minister of Economy, Carlos Body, in Moncloa after the Council of Ministers.

On the contrary, in the electricity sector an increase – and possible new decreases and increases – from 10 to 21% of VAT is not seen with such positivity and protests against the “volatility” in the prices that the Government introduces through these variations VAT, which also affects all consumers because it is also transmitted to those who do not depend on the daily market, which is what is determined if the VAT is 10 or 21%. Households that have free market contracts will also have to pay 15% more, with a fixed price per month set to general for one year but will also see it vary due to variations in the regulated market, daily and hourly auctions.. In the eyes of the sector, it will also generate “uncertainty” among self-employed consumers when it comes to paying VAT quarterly.. For now, if it rises in March, it estimates an increase in the average annual bill will be from 467 to 539 euros.

“Tax lottery”

The sector criticizes what it considers a “tax lottery” that not only affects VAT on electricity, but also other electricity taxes that were lowered in 2022 to address the price crisis and that will also increase progressively.. It considers that the variation in taxes on electricity is a “barrier to the electrification” of demand and requests the Government to review these variable VAT mechanisms, subject to criteria “foreign to the majority of consumers.”

This will happen with the Special Tax on Electricity, which was at the minimum allowed of 0.5% until December 2023; was set at 2.5% between January and March, from April to June it will go to 3.8% before reaching the pre-crisis 5.1% in the second half of the year. With the Tax on the Value of Electrical Energy Production (IVPEE), which until March will be 3.5%, it will rise to 5.25% until June and in the second half of the year it will reach the pre-crisis level of 7%.

The Ministry of Housing published this Tuesday the reference index that will allow limiting the rental price in stressed areas. The indicator, provided for in the housing law approved in the last legislature, contemplates a maximum and minimum range of prices depending on the area and the characteristics of each home, a range that may be taken into account when signing new housing contracts. rent. The system does not convince Catalonia. The community chaired by ERC is the only one that at the moment intends to implement the stressed areas to limit the price of rentals. Sumar and Podemos are also suspicious of the new instrument.

Starting this Tuesday, anyone can check the reference price of the apartment in which they live or any other home on the Ministry of Housing website, by entering the address in a search engine enabled for this purpose at this link.. These prices have been calculated from the income tax return data of 2.5 million landlords and are the result of the joint work of the Ministries of Housing and Finance, the Cadastre, the INE, the Bank of Spain and the College of Registrars, as explained in a press conference by the Secretary of State for Housing and Urban Agenda, David Lucas.

The reference price system sets a range in which rents should fluctuate, depending on the location, surface area and characteristics of the home (the state of conservation, the energy certificate, the year of construction, whether it has an elevator, parking, community areas, concierge…). The Secretary of State has stressed that this index reflects the prices paid in the market, an amount that is often “far below” what is requested, which is intended to avoid speculation.

For example, on real estate portals you can find an advertisement in which an apartment of 70 square meters and two bedrooms is offered for 2,600 euros per month, located near the central Retiro Park in Madrid, on a fourth floor with an elevator.. That same home should be rented for between 1,030 and 1,332 euros, according to the ministry's index. In this way, the new tool helps tenants know how much they pay for apartments of certain characteristics in specific areas and thus know if they are asked for an amount that is too high when signing a rental contract.

Operational in stressed areas

However, the index is not merely informative.. In those areas that are declared stressed areas, the range calculated by the new system must be taken as a reference when determining the amount of the new rental contracts when the home is owned by a large holder – who has ten or more homes or, if This is established by the autonomous community, five in the same stressed area – or rented for the first time in five years, as long as they are located in a stressed area area.. To receive this consideration, it is the regional governments who have to request it and present the relevant documentation to the ministry.

For the moment, only Catalonia has submitted to the ministry the report required to declare a tense zone in its territory that will affect 140 municipalities, according to the calculations of the Generalitat.. However, some of the details of said plan are still pending to be resolved, which includes measures to be adopted over the next few years to 'relax' the price of rentals in these areas.. The declaration of stressed zone also activates the price paid by the previous tenant as a reference for new contracts.. In the case of apartments in the hands of large holders, the most positive reference is applied.

Once the document presented by the Generalitat receives final approval and is published in the Official State Gazette, price control can begin to be applied to new rental contracts in those 140 municipalities based on the index published this Tuesday.. In any case, we will have to wait until March 13 for the new tool to begin to be applied – when it will be published in the BOE – and it will not operate on current contracts. “We have tried to guarantee legal security,” Lucas stressed.

The reference price index, which the Ministry of Housing had promised to have ready “yes or yes” in February, includes data from the 2022 income tax return.. The Secretary of State has pointed out that the 2023 data will be available before the end of the year and has confirmed that the system will be updated annually.. The indicator is not yet available for the Basque Country and Navarra, because these communities have a different tax regime and the Tax Agency does not have the necessary information, although Lucas has assured that “work is being done” to develop the new system in both. territories.

In fact, according to the Secretary of State, the community chaired by María Chivite has already “verbally” communicated to the ministry its willingness to decree tension zones, as has Asturias, although neither of the two has yet presented the required documentation. “I invite other communities to declare tense areas,” he urged.. Housing Sources trust that making this price reference system available to citizens will encourage more regions to request the declaration of a stressed area.

The publication of the index this Tuesday comes a day after the Minister of Territory of the Generalitat, Ester Capella, showed her disagreement with the new indicator after meeting this Monday with the Minister of Housing. The Catalan official criticized the model designed at the national level for establishing a minimum and maximum range of prices, instead of a fixed price, pointing out that “it will not make prices go down, because they will always go to the highest price range.”

Along the same lines, the deputy spokesperson for Sumar in Congress, Aina Vidal, and the spokesperson for Podemos in the Lower House, Javier Sánchez Serna, have also expressed their doubts about the rental price index.. Vidal has explained his reluctance about the maximum and minimum price ranges that he establishes. “They are so broad that they would only reduce the most extreme and most abusive prices,” he warned. For its part, Serna has requested that the meter limit the maximum and minimum price ranges so that “significant” drops can be carried out.

This Tuesday, the Government took the first step to begin mobilizing 40,000 million euros in loans from European recovery funds.. These are approximately half of the credits that Brussels has granted to Spain in this second phase of the recovery plan initiated after the approval of the addendum to the original plan in October 2023 and will be managed by the Official Credit Institute (ICO).

The Minister of Economy, Carlos Body, appeared this Tuesday after the meeting of the Council of Ministers in which the Executive gave the green light to the ICO to begin creating the vehicles through which the loans will be mobilized.. The 40,000 million will be distributed through five funds, which will be allocated to ecological and technological transition projects, business growth, public housing or the audiovisual industry.

For Corpus, the step taken this Tuesday represents the “formal start” of the second phase of the recovery plan, in which the Government will be able to mobilize up to 83,000 million in credits under “advantageous” conditions.. The Minister of Economy has also taken the opportunity to update the execution figures for the first part of the plan and has indicated that around 45% of the aid received has reached the real economy.

The Government's idea is that the first two lines of the ICO begin to circulate already in the second quarter. For this to happen, the organization must first sign an agreement with the corresponding ministries to which the credit institutions will then have to voluntarily adhere.. To finance this type of projects, the ICO turns to commercial banks, which are responsible for mediating with the client interested in receiving the loan.. Thus, the organization delivers the funds to the credit institution, which transfers them to the beneficiary. The latter must return the loan to the bank which, finally, returns the money to the ICO.

Five funds

Of the five “facilities” that the ICO will create to place loans, the best equipped is the so-called ICO-green line. This fund will have 22,000 million euros in loans to promote sustainable transportation or energy efficiency initiatives, among others.. 8,000 million will also be mobilized in the ICO-Companies and Entrepreneurs line, to finance the growth of companies, especially SMEs.

In addition, the Government will create a fund with 4,000 million in loans to finance housing projects. The aim is to increase the housing stock for social rental with affordable rents and improve what already exists.. Minister Corps estimates that 40,000 homes for social and affordable rental could be developed thanks to this financing vehicle.

In addition, the ICO will channel a fund of 4,000 million to facilitate the growth of Spanish startups. This vehicle will be managed by Axis, the organization's venture capital subsidiary.. Finally, the ICO will co-manage 1,712 million euros to finance projects in the Spanish audiovisual sector. It will seek to encourage private investment in film, television, content creation, video games or visual effects.

Loans, a less attractive vehicle

Spain's recovery plan has been structured in two clear parts. The first involved managing 70,000 million in non-refundable transfers. That is, direct aid that has been dedicated to different projects and of which the Government says it has already executed almost half.. After this first phase, in which the efforts have been focused until now, a second begins in which the Executive has the challenge of placing another 10,300 million in transfers and 83,000 million in loans.

The Government has already encountered some problems in allocating the funds for the first part of the plan. The bureaucracy is extensive and there are projects that receive less interest than expected. The consulting firm Llorente & Cuenca estimates that 17% of the funds tendered have not found a recipient. This does not mean that the money will be lost, but it does mean that new calls must be sought to find a recipient, something that is not easy with the strong bureaucracy that accompanies the plan.

In principle, the loans section should be less interesting. Firstly, because although the loans are under advantageous conditions – the interest is lower, there is a 10-year grace period in the payment of the principal, the repayment is 30 years and they allow 100% of the projects to be financed – at In the end you have to return the money.

Furthermore, the financing conditions that currently exist are not the same as when the original plan was designed.. At the time, ECB interest rates were at historic lows.. Today they set maximums waiting for the central bank to decide to lower them, predictably, in the second quarter. This has caused financing costs to skyrocket.. Consequently, requesting a loan is now much more expensive, which discourages the investment that is sought to be mobilized in this part of the plan.

The Minister of Digital Transformation and the Public Service, José Luis Escrivá, announced this Monday in Barcelona the creation of the Spanish Society for Technological Transformation (SETT), which will bring together all investments in technological matters and which would include the participation of 10 % that it plans to take through SEPI in Telefónica.

In an intervention before the press within the framework of the MWC technological event, Escrivá explained that he will take the urgent processing of the creation of this new company to the next Council of Ministers, this Tuesday, and that the objective is that in two or three months is underway. Asked if this large digital ecosystem would integrate Telefónica, he responded: “It makes sense to fit it in.”

This new public business entity will start with an investment mobilization capacity of 20,000 million euros and will execute investments in these strategic sectors, such as telecommunications or generative artificial intelligence (AI), he added.

The SETT will also be in charge of developing the industrial ecosystem throughout the semiconductor value chain, which is why the organization will include the State Society of Microelectronics and Semiconductors (SEMyS), currently attached to the State Society of Industrial Participations (SEPI). ).

Other of its tasks will be to support companies in innovative projects, with the Next-Tech fund, dependent on the Official Credit Institute (ICO), and to support and promote the audiovisual sector, has indicated the also head of Public Function.

Thus, he considered that “it makes sense” that the acquisition of up to 10% of Telefónica agreed by the Government would be carried out through this new company, although he specified that it will be “seen over time.”. “More and more countries know that we need to reinforce strategic sovereignty,” said the minister, who has stressed the importance of putting together all the initiatives in these areas, to generate synergies, as well as having specialized teams capable of analyzing investments. and detect trends.