New VAT Rules for Direct Heat Consumption from Energy Plants: Flat Rate Assessment Basis Set at 3 ct/kWh

• The federal average working price for heat is no longer published, so the previous VAT simplification rule based on this data cannot be used.
• Entrepreneurs may now use a flat rate of 3 ct/kWh as the assessment basis for the free supply of heat, even without a district heating connection.
• This new rule applies retroactively to all open cases.
• The change is based on the CJEU ruling (C-207/23), which clarified that free supply of heat to other taxable persons is treated as a taxable supply, and the cost price includes both direct and indirect costs.
• The BMF letter provides a practical solution aligning with CJEU requirements and simplifies VAT treatment for direct heat consumption.

Source: kpmg.com

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.

---

---