For the taxation of value added as benefit in kind in connection with the operation of a photovoltaic system, a distinction must be made depending on when the photovoltaic system was acquired.
An entrepreneur could fully assign a photovoltaic system acquired before January 1, 2023 to his business. If he or she had waived the application of the small business regulation, he or she was entitled to a full input tax deduction from the acquisition. The privately consumed electricity was subject to taxation as a so-called benefit in kind, whereby the legally permissible input tax deduction was offset downstream in accordance with the system. In these cases, a benefit in kind will continue to be taxable after December 31, 2022.
The removal or benefit in kind of a photovoltaic system that was acquired prior to January 1, 2023 and that was entitled to a full or partial input tax deduction will also (continue to) be subject to VAT as a benefit in kind after December 31, 2022. Nevertheless, it is possible to apply the zero tax rate in this respect. The prerequisite for this is that the system already installed meets the other requirements for the application of the zero tax rate pursuant to § 12 Para. 3 UStG and the entrepreneur intends to use more than 90 % of the electricity generated with the system for non-business purposes in the future. This is assumed for simplification reasons if part of the electricity generated with the photovoltaic system is stored in a battery.
The transaction of withdrawal or gratuitous benefit at zero tax rate does not constitute a change of circumstances pursuant to § 15a UStG and consequently does not trigger an input tax adjustment. An entrepreneur who originally waived the application of the small business regulation for the purpose of claiming the input tax deduction from the acquisition of the photovoltaic system and now withdraws the photovoltaic system at the zero tax rate, however, continues to be bound by the five-year commitment period of the waiver. Accordingly, the supply of the electricity to the grid operator continues to be subject to the standard tax rate of 19 % until the expiry of this commitment period.
If an entrepreneur acquires a photovoltaic system after January 1, 2023 using the zero tax rate, there is no need to deduct input tax due to the lack of tax accrual (tax rate = 0 %). Unlike in the case of an acquisition before January 1, 2023, no downstream compensation of an input tax deduction is therefore required for a system-compatible result. Therefore, in these cases, there is also no taxation of a free transfer of value. The withdrawal or gratuitous donation of a photovoltaic system acquired on or after January 1, 2023 using the zero tax rate also does not constitute a gratuitous transfer of value.
Operators of photovoltaic systems will be granted relief in the event of a system acquisition from January 1, 2023 onwards due to the zero tax rate now to be applied. This is because the associated elimination of the input tax deduction from the system acquisition means that there is no longer any need to waive the small business regulation. Consequently, the remuneration from the feed-in of the electricity generated by the photovoltaic system is no longer taxable. Operators of old systems can claim the application of the zero tax rate in the context of a withdrawal of the photovoltaic system from their business.