Friday, 21 June 2013 - 06:39
VAT On Self-Produced Electricity
Some of the more than 100,000 home owners who have solar panels, must now start paying VAT on electricity generated by themselves. That is the result of a ruling by the European Court of Justice in a dispute over Austrian VAT on solar power. The Court ruled Thursday that individuals who produce solar power are to be seen as an entrepreneur and so have to pay VAT in most cases. The ruling has mainly administrative implications, say specialists of the law firm Loyens & Loeff. Where individuals in the past only paid VAT on the electricity produced by the power company, bidirectional VAT must now be taken into account Any individual with solar panels will now need to register as an entrepreneur, has to send notes and must fill out a special tax declaration. Whoever has to pay less than 1883 euros VAT annually, may be eligible for the small business scheme. This may ultimately lead to the situation that no VAT has to be paid. There is also a positive aspect. The VAT on the purchase of solar panels may now in principle be deducted. Whether the same is true for solar panels purchased in the past, is still unclear. "Apart from the possible return of VAT on the purchase, it is a difficult system to private owners of solar panels,'' said Niels Muller, tax expert on energy, and Trudy Périé, VAT specialist, at Loyens & Loeff.