Life in Germany. Taxes in Germany 2023. During many debates about relief packages and state financial injections, the traffic light coalition’s tax decision was somewhat overlooked. However, many people stand to benefit from it.
The coalition made a decision that no VAT will be charged on delivery, purchase, import or installation of photovoltaic systems. That’s not all. The income from the operation of small solar installations will also be completely exempt from tax beginning 2023.
Single-family houses who have solar batteries with a capacity of up to 30 kilowatts (kWp) will benefit from this action. They can buy their PV installation cheaper, namely directly at the net price, and then operate it tax-free. For residential and mixed use buildings, the limit is 15 peak kilowatts per residential or commercial unit.
How was it previously?
Up to this point, it was possible to obtain a refund of VAT included in the purchase price of photovoltaic installations from the tax office. Previously, privately used solar installations up to 10 kWp could be tax exempt upon application. Authorities tended to classify private PV systems that fed their electricity to the public grid with “profit intent” as a “hobby” as consumer advice knows. Also in this case, the owners were usually exempt from tax. The necessary condition, however, was the profitability forecast.
The turnover of €22,000 was subject to the “Small Business Regulation” and you were not a VAT payer. “This applies to most of all private PV system operators as long as they do not earn other income from self-employment. You should definitely inform the network operator about your decision” – advises the consumer clinic so far.
The consumer clinic also had a different offer, but it was more complicated. It was possible to register the system for VAT purposes. “This has the advantage that you get back the VAT you paid when you bought the system from the tax office.” This, however, involved a lot of administrative work on tax settlements.