Portugal to lower VAT rate on electricity and natural gas

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The Portuguese government will drop VAT rates to the reduced rate of 6% on supplies of electricity and natural gas, however this reduction will not apply to all users.

Those who will benefit from this measure are the ones that have contracted electricity power not exceeding 3.45 kVA or those whose pressure consumption of gas is not over 10.000 m3 per year (1). These limits aim to grant this reduce VAT rate to low-income households.

Besides, the 6% rate will apply in mainland Portugal while a 4% will apply in Azores and 5% in Madeira. The measure will take effect starting 1 July 2019.

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