VAT Exemption (Germany)

Starting from January 1, 2023, a significant change is in place in Germany: there is a zero tax rate for the delivery and installation of specific photovoltaic systems.

Which Systems Are Affected?

This regulation applies to solar modules and "essential components" of systems near private residences, public buildings, or buildings for charitable purposes. The installed gross capacity of the PV system must not exceed 30 kW.

Why This Change?

The introduction of the zero tax rate aims to relieve operators of bureaucracy. They no longer have to pay value-added tax and can maintain the small business regulation without forgoing input tax deductions. However, operators must submit regular tax declarations for at least five years.

Key Details and Exceptions

Leasing and hire-purchase agreements depend on their structure, with leasing explicitly excluded. The zero tax rate applies only if the delivery is directly to the operator. Specific deliveries and installations require documentation.

When Does the Regulation Apply?

The new regulations will only be applicable from April 1, 2023, for certain contracts. For additional details and explanations, please refer to the website of the Federal Ministry of Finance.