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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 on a non-profit basis.

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

This regulation has no effect on sales taxation!

The operators of such plants are still entrepreneurs if they feed the electricity generated by the plant in whole or in part, regularly and not only occasionally, into the electricity grid against 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 sales from other activities - regularly small entrepreneurs within the meaning of § 19 UStG, so that there is no obligation to submit advance VAT returns. The tax offices then also do not insist on the submission of annual VAT returns.

In order to be able to deduct the total VAT attributable to the acquisition or production costs of the plant 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.

For more information on the taxation of sales when purchasing and operating a photovoltaic system, visit the Ministry of Finance website at Baden-Württemberg:

Photovoltaic systems: These are the tax rules

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