Tax Newsletter - October 2018 | Legislation of interest

Tax amendments to reduce wholesale electricity prices

To reduce the price of electricity on the wholesale market, Royal Decree-Law 15/2018, of October 5, 2018 (Official State Gazette -BOE-, October 6), on urgent measures for energy transition and consumer protection has introduced the following new legislation:

1. Electricity generated and fed into the electricity grid in the last quarter of 2018 and the first quarter of 2019 is exempt from the tax on the value of electricity output.

2. An exemption from hydrocarbons excise tax is provided for energy products used in electricity generation at electric power plants or in electricity generation or in the cogeneration of electricity and useful heat in combined cycle plants. To claim this exemption, an application must first have been made to the office managing the tax by the owner of the electric power plants or the combined cycle plants and the exemption must have been authorized by that office.

Publication of list of municipalities applying revised cadaster value multipliers approved for 2019

On September 29, 2018, the Official State Gazette (BOE) published Order HAC/994/2018, of September 17, 2018, setting out the list of municipalities to which the revised cadaster value multipliers set out in the General State Budget Law for 2019 apply.

Annual equivalent rate approved for fourth calendar quarter of 2018, for the purpose of characterizing certain financial assets for tax purposes

On September 27, 2018 the Official State Gazette (BOE) published the decision of September 26, 2018, by the Office of the General Secretary for the Treasury and Financial Policy, which, as is now the custom, sets out the reference rates that will apply for the calculation of the annual effective interest rate for the purposes of characterizing certain financial assets for tax purposes, this time for the fourth calendar quarter of 2018. The rates are as follows:

• Financial assets with terms of four years or less: -0.049 percent.

• Assets with terms between four and seven years: 0.328 percent.

• Assets with ten-year terms: 1.194 percent.

• Assets with fifteen-year terms: 1.438 percent.

• Assets with thirty-year terms: 2.066 percent.

In all other cases, the reference rate for the period closest to when the issuance was made will be applicable.