Reduced Tax Rate on Wood Chips as Firewood; Amendment to VAT Act by Annual Tax Act 2024

• Reduced tax rate applies to the delivery of wood chips as firewood.
• Amendment to number 48 letter a of Annex 2 to the Value Added Tax Act by the Annual Tax Act 2024.
• The Federal Ministry of Finance clarified the application of the reduced tax rate to wood chips.
• The amendment aligns national law with European Court of Justice and Federal Fiscal Court rulings.
• Wood chips are considered firewood if classified under tariff position 4401.
• They must be intended and suitable for burning based on objective characteristics at the time of delivery.
• All types of thermal utilization are covered, such as electricity production or heating.
• Assessment criteria include packaging type and a predetermined moisture level.
• Wood chips with a moisture content below 25 percent are deemed suitable for burning.
• The reduced tax rate may still apply to wood chips with 25 percent moisture or more if no further processing is needed.

Source: bundesfinanzministerium.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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