All aid programs and loans for renewable energy are encouraging not only companies but also individuals to procure, among other things, photovoltaic panels. This not only minimizes the cost of electricity charges, but also has the potential to find sustainable development. According to predictions, photovoltaic panels will be largely used by individuals in the coming years, and this trend will continue for a long time. This is due to the conversion of the energy demand to the possible production capacity of the panels that we can install on our own surface. It should be remembered that many commercial buildings not currently have roofs which would allow the installation of panels. Such actions are conditioned, among others, by the desire to follow innovative ecological solutions, as well as promotion of all subsidies for such possibilities. However, what does the production of electricity for own needs look like from the tax point of view?
Problematic VAT issues
Entities producing electricity for their own use, generating a surplus and then injecting it into the electricity network are not liable for taxation on these activities alone. It is pointed out here that the very operation of such an entity is not profit-oriented, since when it transfers the surplus to the energy company it does not receive payment for it.
So, for example, in the tax ruling of 13 February 2020 (0113-KDIPT1-1.4012.632.2019.5.ŻR), it was indicated that: “(…) the Applicant puts more energy into the grid than it takes in, there is a so-called ‘surplus’ which is put into the grid and is stored for later use by the Municipality and this energy is treated by the Applicant as a kind of storage. (…) the Applicant introduces more energy into the grid than it takes in, a so-called surplus arises, which is introduced into the grid and is stored for later use by the Municipality, and the Applicant treats this energy as a kind of storage, from which it can take the stored energy free of charge, when the amount of energy produced in a given period will not be able to fully satisfy the needs of the Applicant, (…) the Applicant can take from the storage the energy (…), which it introduced into the grid as a result of the created surplus (…)”. I justifying, its position, the tax authority itself indicated that the surplus network constitutes energy storage. However, referring to the issue of taxation, it considered that: electricity network for storage, in a situation where, in a given period, the amount of electricity taken is less than the amount of energy introduced and these surpluses arise. (…). The Applicant is not entitled to receive any renumeration for the surplus energy produced and this energy is stores in the network only for the purpose of its subsequent withdrawal, so this activity is not subject to VAT (…)”. Thus, in view of the above tax ruling, it should be pointed out that question of taxation depend mainly on whether the prosumer will receive remuneration for the surplus produced.
However, discussing tax issues in the PIT area, here the issue is not so problematic, because the very functions performed by an entity generating electricity for its own needs and introducing it to the grid from renewable energy sources do not constitute any source of its revenue. This results, inter alia, from the issue of the possibility to dispose of the generated energy and the fact that this energy is not sold and the possible surplus energy does not entitle the entity to dispose of it freely – this activity is concentrated on the energy company. Here, the question of accounting is not in doubt, as the user of the micro photovoltaic installation does not receive any remuneration for this, which, if necessary, should be properly accounted for.
What is it like with excise duty?
While in the case of PIT the question of accounting was not a complicated one, in the case of excise duty it is necessary to refer to two different options that can occur. A distinction must be made here between the use of energy that will not fed into the grid and energy that is fed into the grid within a certain limit.
In the case of the use of energy that will not be fed into the grid, reference should be made to the Regulation of the Ministry of Finance of 28 December 2018 on exemptions from excise duty, which entitles the energy generator to an exemption from excise duty. The subject of the exemption is highlighted here, which refers to electricity consumed by a generator with a capacity of up to 1 MW. After exceeding this limit – the entity will be obliged to pay excise duty. What is more, the regulation introduces an additional facility – in the case of not exceeding the limit of 1 MW, the entity will not be obliged to prepare measurements of energy which was consumed, as well as to document it.
With regards to the second situation – i.e. the use of energy introduced into the grid and used in accordance with the applicable limits, reference should be made to the sale of energy. It is also worth mentioning that when energy is sold by an energy company to an entity producing energy for itself, this activity will be subject to excise duty. Only the energy supplier who has concluded an agreement with the entity in question will be obliged to pay the tax.