Reduced VAT Rate for Wood Chips as Firewood: Amendment to UStG by JStG 2024.

• The BFH ruled that wood chips qualify for a reduced tax rate if they are considered firewood under specific legal interpretations.
• A BMF letter clarified that this applies only to wood chips intended for burning, based on their presentation or sale quantity.
• The 2024 tax law amendment confirmed that wood chips classified under tariff position 4401 are eligible for the reduced tax rate.
• Wood chips are considered firewood if they are classified under tariff position 4401 and are objectively intended for burning.
• Key factors include presentation, a predetermined drying level, and use for heating spaces.
• A moisture content below 25 percent indicates the wood chips are intended for burning.
• The actual use by the recipient is irrelevant.
• The quantity sold is not a determining factor for classification as firewood.
• The BFH ruling does not apply to other goods not listed in the relevant tax law annex.
• These principles apply to transactions after December 5, 2024.

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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