Electricity company: the electricity credit paid retroactively to the customer does not affect the company’s VAT position

The electricity company does not have to take into account the temporary electricity credit paid retroactively to customers in its VAT declarations. An electricity credit is not, for example, a subsidy or discount that would affect the VAT basis for the sale of electricity. It also has no effect on the scope of the electricity company’s right to deduct.

Electricity companies will retroactively pay electricity credits to their customers for a period of four months (November 1, 2022 – February 28, 2023) based on the consumption of electricity. The electricity company pays the refund to customers automatically by retroactively taking it into account in subsequent electricity bills. The electricity credit is based on a temporary law (the law on retrospectively paid temporary electricity credit).

The purpose of the electricity credit is to support the customers of the electricity company due to the increased costs due to the increase in the price of electricity. Electricity companies are reimbursed for the electricity credit they paid from state funds. The compensation is paid by the State Treasury upon application by the electricity company.

More information: Laws on retroactively paid electricity rebates and extending the payment periods of electricity bills come into effect (valtioneuvosto.fi)

Source: vero.fi

---

---