Excise duty on electricity in the lease of generators. Binding tax ruling of February 14, 2017


A company that is devoted to the rental of generator sets a question to the General Tax Directorate (DGT) about who is the taxpayer of the excise duty on electricity in the following modalities of the activity:

  • Full service where the lessor is responsible for supplying the generator set in addition to transport, installation, set-up, technical assistance and fuel supply under request.
  • Tailored service, where additional services to the lease are offered to the lessee who can hire them individually.
  • Support service, which is the full service, but the generator installed only comes into working when the main source of energy fails.

For such purposes, the DGT uses the articles set for in the Excise Duties Law that regulates the electricity tax. Among them, the article 92 establishes the taxable event of the tax in two cases:

  • The supply of electric energy to a person or entity that acquires electricity for its own consumption, where electricity supply must be understood as both, the provision of toll service for access to the electricity network and the supply of electricity.

For the purposes of this tax, the load manager of the system will always have the status of consumers.

  • The consumption by the producers of electricity of that electricity generated by themselves.

However, article 93 establishes a case of non-subjection for the consumption of generators with a potential equal to or not more than 100 kilowatts of the electric energy produced by them.

On the other hand, regarding the person liable to the tax, the article 96 considers taxpayers, for the first taxable event, to those who supply electricity to the consumer, while for the second case, those who consume the electric energy generated by themselves.

According to the wording of the Law and the mentioned articles, the DGT establishes that the taxpayer of the electricity tax will be, in any case, the one who assumes the direction and responsibility of the production of the electricity, being the direction understood as the set-up and management of production means, including the consumption of fuel and of the human resources necessary to carry out the activity of electricity production. For the present case, the lessor does not assume the direction of the electricity production, but the lessee is in charge of supplying the electric power, so that the latter will be the taxpayer for the tax and who must request the CIE to the corresponding Management Office.

Regarding the tax base of the tax, the DGT uses a binding tax ruling of 2015 (V3694-15), which addressed the question of the tax base in the event that the energy was generated by a generator that did not have an accountant register, but the number of hours of running and the nominal power thereof were known. In this case, these figures were valid to know the amount of energy supplied, thus the tax base would be the same as would have been determined for VAT for a supply of electricity in the VAT territory between unrelated persons, i.e. at market price.

A copy, in Spanish, of the binding tax ruling number V0391/2017 is attached.

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