We wrote about the CJEU’s recognition in Case C 282/22 of the charging of electric cars as a supply of goods ->here<-. In present publication, we will take a closer look at the impact of this position of the Court in the context of the determination of the electricity excise tax payer for car charging stations that at the same time produce electricity themselves, e.g. from renewable energy sources.
Who should pay the excise tax?
According to article 9 sec. 1 pt. 2 the Excise Duty Act, the subject of excise duty is, among others, the sale of electricity to the final purchaser on the national territory. The final purchaser is a person who does not hold a concession for the generation, storage, transmission, distribution or trading of energy with the exception of the 4 entities explicitly mentioned in the legislation, which means virtually most legal and natural persons. The regulation also indicates that excise duty should be collected at the final stage, so in view of the last sale. Moreover, in excise duties, there is a principle of single taxation, i.e. the tax liability in respect of a given excise product should arise at only one stage of trade – the final stage.
The possibility of the charging station owning the energy and making it dependent on being a taxpayer:
- The station purchased energy from the concession holder with excise duty paid – then do not pay excise duty;
- The station also produced energy itself (through its own photovoltaics or wind farm), which it resold as part of its operations.
Should a charging station that produces electricity itself be an excise tax payer?
The CJEU ruling on the classification of electric car charging as a supply of goods affects the VAT taxation of this activity, but excise duties are not directly affected. Indeed, the judgment states that the service elements of this type of activity must be included in the VAT value of the supply of goods. So how this ruling translates into excise taxation? A straightforward translation is not possible, as in excise duty the provision of services is not subject to taxation. However, the judgment highlights the problem of taxing this type of activity, and in excise there is little awareness of taxation.
If the charging station does not use the electricity purchased from the concession holder, but produces the electricity itself and sells it, it is directly performing the taxable activity mentioned in the introduction – if the purchaser does not have a concession itself either. Then this energy is sold to a charging station, so as a seller it should pay the excise duty and this energy should be separated from the energy purchased with excise duty. This is because an entity producing energy and selling it is not subject to the excise duty exemption provided for small (up to 1MW) RES installations, as it does not leave the energy for its own use, but sells it.
In summary, where an electric car charging station has its own source of electricity – from which it draws its energy and then sells it to the person charging the car – it should pay excise duty on the grounds that excise duty is not charged on energy produced in-house and not purchased from another entity. It is also important to note when a taxpayer sells purchased and self-produced energy. Therefore, it should be technically possible to calculate the amount of energy sold that is self-generated.