This taxation applies to newly installed photovoltaic systems

This taxation applies to newly installed photovoltaic systems

Anyone who owns a photovoltaic system to generate energy wants to save - and usually not just emissions. Good to know: there are usually no taxes for newer systems.

The 2023 reform of the German Renewable Energy Sources Act (EEG) has massively simplified the tax treatment of newly installed photovoltaic systems. Many new systems operated by private individuals on roofs, carports or balconies are no longer subject to taxation at all. For example, a VAT rate of zero percent applies to the private purchase of a photovoltaic system, and no VAT is added to the feed-in tariff paid out by the grid operator. Two tax consultants explain what applies in detail.

"In principle, the following taxes can be incurred when purchasing and operating a photovoltaic system: VAT on the purchase price, VAT on own consumption and the feed-in tariff, income tax and trade tax," explains tax consultant Lutz Spieker from Holzminden. With the 2023 EEG reform, however, the legislator has ensured that these taxes are generally no longer incurred for new systems with an output of up to 30 kWp (kilowatt peak, i.e. the maximum output that photovoltaic modules can achieve under standardized conditions).

Tax treatment of new systems

Trade tax: "You never pay trade tax for systems up to 30 kWp, as they always fall under the trade tax exemption limit of 24,500 euros," explains Berlin tax expert Melchior Neumann.

Turnover tax on delivery and installation: According to Section 12 Paragraph 3 of the German Turnover Tax Act (UStG), this is zero percent, says Neumann - if certain conditions are met. These are listed in the aforementioned paragraph:

• According to the market master data register, the maximum output is 30 kWp or less.
• The photovoltaic system is installed on or near private residences, apartments and public and other buildings that are used for activities serving the common good.

This VAT exemption applies not only to the minimum required components such as PV modules and inverters, but also to installation materials, cables or battery storage systems.

Income tax exemption: Spieker refers to paragraph 3, number 72 of the Income Tax Act (EStG). According to this, the following systems are exempt from income tax:

• PV systems up to 30 kWp that are installed on single-family homes or buildings not used for residential purposes.
• PV systems installed on other buildings, such as apartment buildings or commercially used buildings, with up to 15 kWp per residential or commercial unit.

This applies regardless of what the electricity is used for. If a person operates several systems, a maximum of 100 kWp can be exempt from income tax, for example three 30 kWp systems on single-family homes and one 10 kWp system on an apartment building. System operators also do not have to determine their income and do not have to declare it in their income tax return.

Value added tax on feed-in remuneration

The so-called small business regulation applies here. This is because PV systems up to 30 kWp regularly generate a turnover that is below the small business turnover limit of EUR 22,000 per year. If you do not expressly waive this small business status, the profit from the feed-in tariff is therefore exempt from VAT.

VAT on own consumption

According to Spieker, this is also not due because no input tax is incurred on the purchase of the system and there is therefore no taxation of a free transfer of value (in accordance with Section 3 Paragraph 1b Sentence 2 UStG).

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1. Consumers can save significantly on their tax return with the installation of a new solar system, as renewable energies like solar energy are often exempt from taxes due to the 2023 reform of the German Renewable Energy Sources Act.
2. Many homeowners, who have installed photovoltaic systems for energy generation, can benefit from the tax advantages, such as the exemption from VAT on the purchase of a photovoltaic system and the feed-in tariff.
3. During the energy crisis, renewable energy sources like solar energy play a crucial role in reducing the electricity price for consumers, saving them money on their energy bills.
4. When consulting tax tips, individuals considering installing solar systems should seek advice from a tax advisor to understand the complex tax rules and regulations associated with renewable energy systems.
5. To ensure a smooth tax-free operation of solar systems, it is essential to comply with the conditions such as installing the system below 30 kWp and on buildings used for common good activities.
6. To maximize savings, consumers can explore the addition of battery storage systems to their solar systems, which are also exempt from VAT, allowing for even greater energy independence and cost-saving benefits.

Source: www.ntv.de