Status: 08/18/2022 12:52 p.m
The federal government wants to lower the VAT rate on gas: the tax will fall from 19 percent to seven percent for a limited period, said Chancellor Scholz. This is intended to relieve consumers of the gas surcharge.
With gas prices soaring, VAT on gas will be reduced. Chancellor Olaf Scholz announced that it would be seven percent in the future instead of the previous 19 percent. With the step, the gas customers would be relieved overall much more than they would be burdened by the state gas surcharge.
The SPD politician said he expects companies to pass on the tax cut one-to-one to consumers. “This is another step towards relief.”
No VAT exemption approved
The background is the planned gas surcharge from October. It is intended to protect gas suppliers who have to buy replacement gas from Russia at high prices for the lack of cheaper gas. Added to this is the fact that higher procurement costs are gradually reaching customers anyway. All gas users will then have to pay the surcharge, regardless of whether they are private individuals or companies – initially at around 2.4 cents per kilowatt hour. Value added tax also applies to the levy.
The federal government actually wanted to prevent VAT and thus ensure that the state did not earn money. However, the EU Commission rejected this. European law does not provide for a waiver of VAT. The legal framework allows for no exceptions, wrote EU Economic Commissioner Paolo Gentiloni in a letter to Finance Minister Christian Lindner. However, the federal government has the option of reducing the applicable VAT to the EU minimum rate of five percent.
Valid until the end of March 2024
The traffic light coalition does not choose this step. Instead, she wants to use the reduced tax rate of seven percent on all gas consumption. In Germany, a VAT rate of 19 percent usually applies. However, seven percent are charged on selected goods. The tax relief that has now been announced should apply for the period of the gas surcharge, i.e. until the end of March 2024.
About half of all households in the Federal Republic heat with gas. According to example calculations, the surcharge for a one-person household with an annual consumption of 5000 kilowatt hours means annual additional costs of around 121 euros, even without VAT. For a family household with an annual consumption of 20,000 kilowatt hours, the additional costs without VAT are around 484 euros per year.
In addition to the gas surcharge, there will also be a balancing and storage levy, which together add up to around one cent.
Statement by Chancellor Scholz on the reduction in VAT on gas
Dietrich Karl Mäurer, ARD Berlin, 18.8.2022 12:27 p.m