Germany Exempted VAT Of Roof PV Below 30kW

Last week, the German parliament approved a new package of tax breaks for rooftop photovoltaics, including a VAT exemption for systems under 30 kilowatts.

It is understood that the German parliament debates the annual tax law at the end of each year to draw up new rules for the next 12 months. The annual tax law for 2022, approved by the Bundestag last week, changes the tax treatment of photovoltaic systems in all its aspects for the first time.

The new rules will address some of the key issues with small photovoltaic systems and include two important modifications to photovoltaic systems. The first measure is to cut VAT to 0% for residential PV systems of up to 30 kW. The second measure would provide tax exemption for small PV system operators.

Formally, however, the fix is not a VAT exemption for the sale of PV systems, but a net price offered to the customer by the supplier or installer, plus 0% VAT.

The VAT zero rate will apply to the supply and installation of photovoltaic systems with the necessary fittings, and it will also apply to storage systems in residential buildings, public buildings and buildings used for public utility activities, with no limit on the size of the storage system. The income tax exemption will apply to operating income from photovoltaic systems for single-family homes and other buildings up to 30KW in size. In the case of multi-family housing, the size limit will be set at 15KW per residential and commercial unit.