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Information Oberfinanzdirektion Karlsruhe

Value added tax for smaller photovoltaic systems and combined heat and power plants

Upon application, smaller photovoltaic systems and combined heat and power plants can be assumed to be operated without the intention of making a profit.

Income from the operation of the plants is therefore no longer included in income tax (information on this is available here ).

This regulation has no effect on turnover taxation!

The operators of such systems continue to be entrepreneurs if they feed the electricity generated by the system into the electricity grid in whole or in part, on a regular basis and not just occasionally, in return for payment (Section 2.5 (1) UStAE). An intention to make a profit is not required to qualify as an entrepreneur

The system operators are - insofar as they do not generate turnover from other activities - regularly small entrepreneurs within the meaning of § 19 UStG, so that there is no obligation to submit advance VAT returns and annual VAT returns

In order to be able to deduct the total VAT attributable to the acquisition or production costs of the system as input tax, it is possible to opt for standard taxation. If the entrepreneur makes use of this option, he is bound to this decision for at least five calendar years. As a new entrepreneur, he is obliged to submit quarterly advance VAT returns and an annual VAT return within the first two years. In addition, he must pay tax on his initial sales and on the private consumption of the electricity generated. In return, he also receives the sales tax on the feed-in tariff from the grid operator

Further information on the taxation of turnover when acquiring and operating a photovoltaic system can be found in the "Tax Tips on Energy Generation" of the Ministry of Finance Baden-Württemberg (Tax Tips on Energy Generation of the Ministry of Finance Baden-Württemberg, Tax Tips on Energy Generation).


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