EU Commissioner rules out VAT exemption on German winter gas levy
Berlin had earlier announced that German consumers would have to pay significantly more for their gas, starting in October to help gas importers. Importers who were having to buy more expensive gas from suppliers outside Russia were suffering huge losses.
A winter gas levy for German households and businesses, aimed at helping gas importers compensate for soaring costs, cannot be exempted from Value-Added Tax (VAT).
European Union (EU) Economy Commissioner Paolo Gentiloni said this on Wednesday in Brussels.
The current legal framework in the EU for VAT rates does not allow for the exemption, Gentiloni confirmed to German Finance Minister Christian Lindner in a letter seen by dpa.
Lindner, from the pro-business Free Democrats, had asked the European Commission for an exemption from EU tax rules a VAT charge on the levy and to avoid even higher gas prices for consumers.
EU law sets minimum VAT rates for all member countries and only allowed a complete exemption for food and other basic needs.
In his letter, Gentiloni outlined a number of possible measures to offset the increased costs, including reducing the levy to accommodate the VAT or paying back the VAT directly to consumers.
Berlin had earlier announced that German consumers would have to pay significantly more for their gas, starting in October to help gas importers.
Importers who were having to buy more expensive gas from suppliers outside Russia were suffering huge losses.
The levy was set at 2.4 cents (2.45 U.S. cents) per kilowatt hour and was expected to cost an average household nearly 500 euros per year.
Adding 19 per cent VAT to the levy would mean another roughly 0.46 cents per kilowatt hour or 576 euros on average per year.