Consumers can hope that the VAT cut on gas will only expire at the end of March – and not at the end of February. Corresponding signals came from the SPD against the background of negotiations between the Bundesrat and the Bundestag. The energy industry called on politicians to allow the tax cut to apply until the end of March. This would relieve the burden on households until the end of the heating season, said the head of the industry association BDEW, Kerstin Andreae.
Because of the increased energy prices after the Russian attack on Ukraine, the federal government reduced the VAT rate for gas and heat from 19 to 7 percent, making both cheaper. According to current law, the measure is set to expire at the end of March. However, the Growth Opportunities Act passed by the Bundestag stipulates that the VAT reduction expires at the end of February. The reason given is that energy prices have now fallen again.
However, the Growth Opportunities Act is stuck in the mediation committee of the Bundesrat and Bundestag. Essentially, it provides tax relief for companies of seven billion euros per year. The Federal Council had blocked the law because it led to a loss of income for the states. The mediation committee meets on February 21st. The next regular meeting of the Federal Council is on March 22nd, although there could also be a special meeting.
The financial policy spokesman for the SPD parliamentary group, Michael Schrodi, said that the expiry of the reduced tax rate on gas and district heating at the end of February would have required the Federal Council to decide on the corresponding change to the sales tax law last Friday. “That didn’t happen. We therefore assume that the originally agreed period will remain until the end of March, because a timely legislative resolution is now no longer possible. As a result, we welcome this, because we have been committed to this from the beginning. that people will be relieved of their heating costs until the end of the heating season.”
The energy industry demands planning security. “It is crucial for companies to have timely clarity in order to implement the necessary adjustments on time,” said Andrae. A reversal and rebilling for companies would be “procedurally and technically complex, extremely difficult to implement and, above all, no longer possible to communicate to customers” – should politicians decide in March that the VAT reduction will expire at the end of February.
Invoices would have to be corrected subsequently, future invoices could not be issued on time and payment plans could not be adjusted, says Andreae. “From the perspective of the energy industry, the early increase should be dropped in the Mediation Committee. Instead, the reduction in VAT should expire reliably and predictably at the end of March, as provided by law.”
The general manager of the VKU municipal utilities association, Ingbert Liebing, added that the back and forth in recent months had created unrest and uncertainty among municipal utilities and their customers. “Especially when clarity is only created shortly beforehand, especially since we lack the imagination as to how we could still legislate for an expiry on February 29, 2024.” Ultimately, short-term implementation would again involve great effort and high costs. Liebing referred, among other things, to an IT change and information to customers. The VKU therefore strongly advises against premature expiry.
So what does this all mean for consumers? According to calculations by the comparison portal Verivox, a delayed increase in VAT would bring relief of 20 euros for a family with an average consumption of 20,000 kilowatt hours. However, the burden of returning to the full VAT rate would be significantly heavier on an annual basis: the model family currently pays a nationwide average of 2,074 euros for gas with the reduced VAT rate. With the full rate of 19 percent, it would be 2,307 euros – an increase of eleven percent. Verivox energy expert Thorsten Storck said: “As a result of the change, consumers have no special legal right to cancel. They should therefore check their contract as early as possible and look for the cheapest possible tariff.”