Landlord’s Electricity Supply to Tenants Subject to VAT, German Court Rules

• Gert Klöttschen discusses a court ruling from July 17, 2024, stating that landlords supplying electricity to tenants can be subject to VAT
• This taxation applies even if the property rental itself is exempt from tax
• The case involves a landlord who produced electricity using photovoltaic systems installed in 2018 on two residential buildings
• The systems include batteries and meters to track total electricity produced and the amount supplied directly to tenants
• Excess electricity is sold to a company
• When tenant demand exceeds supply, the landlord buys additional electricity and sells it to tenants at a profit
• Electricity is billed annually based on consumption with tenants paying installments throughout the year
• The price of electricity provided is in line with market rates
• Electricity supply terms are specified in an addendum to the lease agreement

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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