Tax Relief for Businesses: Changes to the Electricity Tax Act
Since the beginning of 2024, there have been significant changes to the electricity tax that particularly affect companies in the manufacturing sector. The 2024 Budget Financing Act expanded the options for electricity tax relief. But what does this mean in practice, and who benefits from it?
Background: Electricity Price Package and Budget Debacle
In early November 2023, the federal government announced its electricity price package, which included, among other things, a reduction of the electricity tax to the European minimum rate. However, a budget debacle caused some turbulence in the plans. Ultimately, however, manufacturing companies will benefit from a reduction in the electricity tax to the European minimum rate of €0.50/MWh.
Details of the legislative change
The tax relief for companies is provided through an increase in the relief amount pursuant to Section 9b of the Electricity Tax Act (StromStG). This means that companies can now benefit from the tax relief starting at a lower electricity consumption threshold of 12.5 MWh. Previously, this threshold was just under 50 MWh.
It is important to note that the tax relief is only granted if the relief amount exceeds a certain base amount of €250 in the calendar year. However, due to the increase in the relief amount, this threshold is reached more quickly.
Who can benefit from the tax relief?
The tax relief is primarily relevant for manufacturing companies with significant electricity consumption. However, smaller companies can also benefit from the relief under certain conditions. Due to the legal changes, small and micro-enterprises may now also qualify for the relief and benefit accordingly.
Application and Next Steps
To benefit from the electricity tax reduction, eligible companies must submit an application for a refund. This application must be submitted to the relevant main customs office by December 31 of the year following the calendar year in which the electricity was consumed.
It is expected that, due to the new legal regulations, the number of applications will increase starting in 2025. This will also impact tax firms, which will need to assist their clients with the application process.
Conclusion
The changes to the Electricity Tax Act represent a significant relief for companies in the manufacturing sector, particularly with regard to their electricity costs. The expansion of the group of eligible entities now allows smaller companies to benefit from this tax relief as well. Submitting an application in a timely manner is crucial to fully taking advantage of the new regulations.
Our team of tax advisors in Düsseldorf and Oberhausen is here to assist you with any questions regarding tax relief and to help you with the application process. Please contact us; we look forward to hearing from you.
