Down to 0%! Germany is exempted from value-added tax on roof photovoltaic system under 30kW!

Down to 0%! Germany is exempted from value-added tax on roof photovoltaic system under 30kW!

Last week, the German Parliament approved a new tax reduction scheme for roof photovoltaic, including the exemption of value-added tax on solar systems below 30 kilowatts.

It is understood that the German parliament will debate the annual tax law at the end of each year to draft new regulations for the next 12 months. The 2022 annual tax law approved by the Bundestag last week comprehensively revised the tax treatment of photovoltaic system for the first time.

The new rules will solve some key problems of small photovoltaic system, and the scheme includes two important modification measures for photovoltaic system. The first measure is to reduce the VAT on residential photovoltaic systems up to 30 kW to 0%. The second measure will provide tax-free treatment for small PV system operators.

However, formally speaking, the fixing is not a VAT exemption for the sales of photovoltaic systems, but a net price offered by suppliers or installers to customers, plus 0% VAT.

The zero VAT rate will apply to the supply and installation of photovoltaic systems with necessary accessories. It will also apply to the energy storage systems in residential buildings, public buildings and buildings used for public activities. There is no limit on the scale of the energy storage systems. The exemption of income tax will be applicable to the operating income of photovoltaic system of single family residence and other buildings, with the scale not exceeding 30KW. If it is a multi family residence, the scale limit will be 15KW for each residential and commercial unit.