Last week, the German parliament approved a new tax relief package for rooftop PV, including a VAT exemption for PV systems up to 30 kW.

It is understood that the German parliament debates the annual tax law at the end of each year to draw up new regulations for the next 12 months. The annual tax law for 2022 approved by the Bundestag last week for the first time comprehensively revised the tax treatment of solar systems.

The new rules will address some key issues with small photovoltaic systems, and the plan includes two important modifications to photovoltaic systems. The first measure is to cut VAT to 0% for residential PV systems up to 30 kW. The second measure will provide tax exemptions for operators of small PV systems.

However, formally, the fix is not a VAT exemption for the sale of photovoltaic systems, but rather a net price charged by the supplier or installer to the customer, plus 0% VAT.

The zero VAT rate will apply to the supply and installation of photovoltaic systems with the necessary accessories, it will also apply to storage systems in residential buildings, public buildings and buildings used for public utility activities, there is no limit to the size of the storage system. The income tax exemption will apply to operating income from photovoltaic systems for single-family homes and other buildings up to 30KW in size. In the case of multi-family dwellings, the size limit will be set at 15KW per residential and commercial unit.