It's a discreet increase, but one that promises to weigh on the monthly budgets of French people. Until now, the electricity bill benefited from a reduced VAT rate of 5.5% on the fixed portion (the subscription), while consumption was already taxed at 20%. This differentiation, long justified to protect purchasing power, is no longer in compliance with European law: the Court of Justice of the European Union now requires that all inseparable elements of the same service be subject to the same VAT rate. As a result, your bill will increase.
From August 1, 2025, VAT on electricity and gas subscriptions will therefore be aligned with the full rate of 20%. For a standard electricity subscription (6 kVA power, regulated tariff), the annual increase will be approximately €23. For a gas-heated household, the additional cost will range between €16 and €38 depending on the subscription.
Partial compensation
To limit the impact of this increase, the government has planned a reduction in the energy excise tax, the main consumption tax. On August 1, 2025, it will drop from €33.70/MWh to €29.98/MWh for meters not exceeding 36 kVA. For gas, it will drop from €17.16/MWh to €15.43/MWh.
But this compensation is not uniform. Since the excise tax is proportional to consumption, households that consume little energy will benefit less from the reduction in this tax, while they will bear the brunt of the increase in VAT on the subscription. Conversely, large consumers could see their bills decrease slightly, with the reduction in the excise duty on consumption offsetting, or even exceeding, the increase in VAT on their fixed portion.
The effect of this reform therefore depends on the consumption profile:
- Small consumers (low-income households, second homes, very energy-efficient homes): the increase in VAT on the subscription will have a proportionally greater impact, as the fixed portion represents a significant fraction of their bill.
- Large consumers (large families, homes heated by electricity or gas, businesses): the reduction in the excise duty on consumption may offset, or even exceed, the increase in VAT on the subscription.
This reform comes at a time when the regulated electricity tariff fell by 15% in February 2025, after two years of soaring prices. The government justifies the VAT increase by this price lull, while recalling the need to comply with European law and to shore up public finances. However, energy has seen a series of recent increases: the excise duty on electricity had already been increased by 60% at the start of 2025, and the network usage tariff (TURPE) has seen two successive increases.
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