Tax & Legal

In a recently published interim decision, the Supreme Tax Court expressed considerable doubts as to the legitimacy of the German Energy Crisis Contribution Act which was in force for years 2022 and 2023.

The German government published details of a draft bill to modernize and simplify the present electricity and energy tax system. Operators of charging stations for electric cars and electricity storage systems are to be relieved from excessive bureaucracy and tax obligations.

According to a recent decision of the Münster Tax Court the energy price allowance paid to employees in 2022 is taxable as income from employment. Section 119 para. 1 sentence 1 Income Tax Act, as contested by the plaintiffs, is not unconstitutional.

Today, the EU Commission approved, under State aid rules, German measures to support electricity production from renewable energy sources through amendments to the Renewable Energy Act and a scheme to support offshore wind energy generation by amendments to the German Offshore Wind Energy Act.

In its parliamentary session of today the Bundestag has approved certain measures towards reducing gas costs for consumers and measures to address general cost increases (inflationary costs).

On 14 September 2022, the Federal Cabinet approved a draft Finance Bill 2022, a working model for a bill to temporarily reduce the VAT rate on gas supplies made through the natural gas grid, and to amend the Energy and Electricity Tax Act peak compensation scheme.

The European Commission is proposing an emergency intervention in Europe's energy markets to tackle recent dramatic price rises. The proposals include exceptional electricity demand reduction measures, which will help reduce the cost of electricity for consumers, and measures to redistribute the energy sector's surplus revenues to final customers.

In view of the rise in gas prices, the German government wants to ease the burden on consumers in terms of value added tax (VAT). In future, the VAT on gas consumption will be 7 percent instead of the current 19 percent, Chancellor Scholz announced in Berlin. This is to apply until March 31, 2024 – i. e., as long as gas levies are charged.

The Supreme Tax Court has held that an aircraft operator qualifies for energy tax refund on the fuel used for flying goods and freight for group companies even if it does not hold a licence to operate an airline.

Energy excise duty on substitute products follows primarily the intended use. If however, there is doubt as to whether the comparative product could be used for the intended purpose, it may be appropriate to classify the product by “its properties and intended use”.