08/21/2023
Source: Energy & Management Powernews
Operators of older small PV systems can now prevent the Liebhaberei taxation after all. The Ministry of Finance has also officially commented on the tax exemption since 2022.
The Federal Ministry of Finance (BMF) announced on August 17 in a roundmail to the tax authorities of the states specified the new tax exemption for profits from small photovoltaic systems and thereby also announced tax relief for old cases.
Accordingly, private and entrepreneurial operators of small photovoltaic systems that have gone into operation by 2021, can now still choose by application whether their activity is considered a tax-exempt hobby. The BMF extended the already expired application deadline until the end of the year. However, this is no longer possible for newer plants.
If an economic activity is permanently in the red, the tax authorities generally classify it as a hobby. Then the losses from it no longer press the tax burden. On the other hand, according to the letter, the tax authorities now have to assume hobby if small PV systems on the owner-occupied residential building are involved. This can be advantageous as soon as the plants have amortized.
Retrospectively since January 1, 2022
In addition, profits from the vast majority of PV plants have been tax-free since the 2022 tax year, regardless of their commissioning date. This was decided retroactively by the Bundestag shortly before Christmas 2022 (new number 72 in Section 3 of the Income Tax Act).
The tax exemption applies to individuals as well as to tax co-partnerships, such as GbR, as well as to corporations, such as GmbH. It includes, for example, the profit from EEG feed-in tariffs, tenant electricity and charging electricity. Own consumption in the residential area is considered a profit-increasing withdrawal from the business assets, but not the charging of an electric or hybrid vehicle from the same business assets or electricity for workrooms of employees of the system operator.
The following requirements apply:
- PV systems must be installed on, at or in a building . This extends to carports, garages, and garden sheds, as well as façade PV or roof-integrated PV. The operation of ground-mounted systems is still taxed. However, a tax liability on one facility does not destroy the tax exemption on other facilities in the same hand.
- Single-family home or commercial property with only one trader: Per taxpayer, the PV system may not exceed 30 kW. The maximum power applies per relevant building, not per taxpayer. Example: If a PV entrepreneur operates on three different single-family homes each a 25-kW system, he remains tax-free.
- However, with five such installations, the tax exemption would be gone. The general upper limit per tax citizen is 100 kW. But it is not counted achievements of other plants, in which the tax-exempt additionally participates and for which he must pay taxes. The entry in the Market Master Data Register of the German Federal Network Agency is decisive for the power figure and the plant term. According to him, 3.13 million of the total 3.36 million German solar systems perform less than 31 kW.
- For multi-unit residential, multi-unit commercial, or mixed-use properties , the limit is 15 kW, but per residential or commercial unit. Example: on a residential building with three parties, the limit is 45 kW for a single taxpayer. However, if his wife also operates a 15 kW system on the same residential building or on another house and is operationally separate from him, both remain tax-exempt. This can be designed, even retroactively.
- The respective building does not have to belong to the taxpayer. This allows operator diversity on a building , comments tax consultant Simon Gossert from the law firm Ecovis in Munich.
- The tax exemption begins and ends on the exact day on which the tax-exempt circumstance arises or ceases, for example, when commercial premises are divided.
This is how the taxman pays for PV operations with
The tax exemption began on January 1, 2022, and is independent of whether a company's fiscal year differs from the calendar year. The highlight for private individuals: if maintenance and repair work is incurred, you can even reduce the rest of your income tax burden. Craftsman services are namely deductible up to 1,200 euros per year if the equipment is located on the house used as one's own home.
BMF letters on taxation matters merely express the legal opinion of the federal government. Although the state tax authorities must take this legal interpretation into account, in principle a tax official may also decide otherwise by invoking conflicting statutory norms or case law. Technical procedural rules, on the other hand, such as application deadlines, are binding.
Author: Georg Eble
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