European Foundation
for the Improvement of
Living and Working Conditions

The tripartite EU agency providing knowledge to assist
in the development of better social, employment and
work-related policies

EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure PT-2022-43/3048 Updated – measures in Portugal

Reduction of VAT on electricity supply

Redução do IVA no fornecimento de eletricidade

Country Portugal , applies nationwide
Time period Temporary, 22 October 2022 – 31 December 2024
Context War in Ukraine
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery into a green future
– Support for energy bills
Author Heloísa Perista, Maria da Paz Campos Lima, Paula Carrilho, Ana Brázia (CESIS) and Eurofound
Measure added 14 February 2023 (updated 25 April 2024)

Background information

The Government approved a set of exceptional measures to support family income, with a view to mitigating the effects of inflation and the consequent increase in prices: the "Families First" package of measures.

Related measures include Freezing of public transport prices and Adherence to the regulated tariff for the sale of natural gas .

The reduction of VAT on electricity supply is a measure included in this package. It was established by Law 19/2022 of 21 October.

Content of measure

Article 4 of Law 19/2022 of 21 October transitorily reduces the value-added tax rate applicable to electricity supplies. Thus, the intermediate VAT rate on electricity consumption will be reduced from 13% to 6% from October 2022 until December 2023.

This 6% VAT decree will apply to the first 100 kWh consumed each month or 150 kWh per month in the case of large families (households consisting of five or more people), provided that the contracted power does not exceed 6.9 kVA. With the new measure:

  • Power below 3.45kVa: 6% VAT on power, 6% VAT on first 100kWh of consumption, and 23% VAT on remainder.
  • Power between 4.6 and 6.9kVa: VAT of 23% on power, VAT of 6% on the first 100kWh of consumption, and VAT of 23% on the remainder.
  • Power greater than 6.9kVa: 23% VAT on power, 23% VAT on consumption.

The measure has an estimated annual cost of €90 million. In 2022, it will cost up to around €22.5 million.


The following updates to this measure have been made after it came into effect.

01 January 2024

The 2024 State Budget extends the application of the reduced tax rate, until 31 December 2024, applicable to supplies of electricity for consumption, excluding its fixed components, in relation to a contracted power not exceeding 6.90 kVA, in the part that does not exceed:

  • 100 kWh per 30-day period;
  • 150 kWh per 30-day period, when purchased for consumption by large families, households consisting of five or more people being considered as such.

Use of measure

All families with power up to 6.9 kVA will benefit from this reduction in the VAT on electricity, covering 87% of consumers (in low voltage), totalling 5.3 million beneficiaries.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level


Social partners´ involvement took place in the context of the tripartite Permanent Commission of Social Concertation (CPCS), which includes: government representatives; representatives of employer confederations, i.e., the Entrepreneurial Confederation of Portugal (CIP), the Confederation of Commerce and Services of Portugal (CCP), the Confederation of Farmers of Portugal (CAP), and the Confederation of Portuguese Tourism (CTP); and the representatives of trade union confederations, i.e., the General Confederation of Portuguese Workers (CGTP) and the General Union of Workers (UGT).

Views and reactions

CGTP considers that the Families First package of measures presented by the government do not guarantee the necessary response to the growing difficulties of workers and their families. The "price increase response plan" does not solve the day-to-day difficulties that workers and pensioners are facing.

UGT also expressed some criticism. Families First is an essential and welcome package of measures, even if it can only be considered late and clearly insufficient, something that is all the more evident when we analyse the sets of measures that were gradually taken by other countries, which were earlier and more intense in their intervention.



Eurofound (2023), Reduction of VAT on electricity supply, measure PT-2022-43/3048 (measures in Portugal), EU PolicyWatch, Dublin,


Eurofound publications based on EU PolicyWatch

30 January 2023


Measures to lessen the impact of the inflation and energy crisis on citizens

Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.


12 September 2022


First responses to cushion the impact of inflation on citizens

Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.


12 September 2022


Policies to support EU companies affected by the war in Ukraine

This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.


5 July 2022


Policies to support refugees from Ukraine

This article summarises the first policy responses of EU Member States, including those of the social partners and other civil society actors, enabling refugees to exercise their rights under the Temporary Protection Directive.


Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.