Published on: July 10, 2025 | Article No: 332 | By: @rprasanth_kumar
Starting 1st August 2025, your electricity bill in France is set to look different — and for many, more expensive. That’s because the government is scrapping the reduced VAT rate on parts of your energy bill, aligning the country with EU tax rules. While some taxes are being cut to cushion the blow, the change still brings a noticeable shift in how your bill is calculated.
Here’s what’s changing, what stays stable, and how it may impact your wallet.
VAT on electricity bills increases for everyone
Until now, electricity bills in France were taxed at two different VAT (value added tax) rates:
✅ 5.5% on the fixed part of your bill (the subscription and CTA – a transport-related contribution),
✅ 20% on your energy consumption and related taxes.
From 1st August 2025, everything will be taxed at 20%. That means both the subscription fee and consumption will carry the higher VAT rate. This change brings France in line with European regulations, which require a single VAT rate per service.
Bottom line: even if your electricity use doesn’t increase, the tax portion of your bill might.
But Accise Taxes Are Going Down
To offset this VAT hike, the French government is lowering accise taxes, which are levied on the volume of energy consumed.
✅ Electricity accise will drop from €33.70 to €29.98 per MWh, an 11% decrease.
✅ Gas accise will fall from €17.16 to €15.43 per MWh, down just over 10%.
This move helps stabilize prices, especially for households with higher energy usage, where consumption makes up a larger share of the bill.
TURPE Cut Balances Network Costs
- The TURPE, a tariff that covers the cost of using electricity networks, rose by 7.7% in February 2025.
- But, it will drop by about 2.5% in August 2025 to help balance out the overall price impact.
- This change also applies to market-based electricity offers, not just those under the regulated tariff.
Net Impact? Depends on your electricity consumption
According to France’s energy regulator, CRE, most consumers will see minimal changes to their annual bill. For example: A household consuming 4,400 kWh per year will see its annual bill drop slightly, from €1,050 to €1,046 — a €4 decrease.
Why the small drop?
- Higher VAT on the subscription increases costs for all.
- But lower taxes on consumption reduce costs — especially for heavy users.
So:
- If you use little energy, the VAT increase might hurt more.
- If you’re a high-energy household, the lower cost per kilowatt-hour helps offset the VAT bump.
Reminder: What makes up your Energy Bill in France?
Your electricity bill includes:
- Energy consumption
- Subscription fee
- Network usage fees (TURPE)
- Taxes and contributions:
- CTA (for energy worker pensions),
- Accise taxes (on electricity and gas),
- VAT (on nearly everything above).
Why Is France Doing This?
The change comes from the 2025 Finance Law, which brings VAT rules in line with EU standards. Until now, France was the only country applying a split VAT on electricity bills — and that’s no longer allowed.
Final Thought: This summer’s shakeup to electricity pricing is less about raising revenue and more about compliance with European law.
- The government has tried to soften the blow with tax cuts and tariff adjustments — but for households, especially those on low usage plans, this may still feel like a price increase.
- If you’re on a fixed-price energy contract, watch closely — not all providers will automatically pass these changes through.
- Whether the overall shift saves or costs you money comes down to one thing: how much power you actually use.
Sources: service-public.fr, edf.fr, and totalenergies.fr
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Any finance-related information shared is not professional legal, tax, or investment advice. The information provided is of an educational and general nature and is not investment advice within the meaning of Articles L. 321-1 and D. 321-1 of the French Monetary and Financial Code. Investment carries risks of loss and past performance does not guarantee future performance. Please consult a financial advisor for any professional advice.