Relief package: Federal Environment Agency proposes tax breaks

Solar systems on house roofs

The Federal Environment Agency advocates setting the VAT for solar systems to zero. This should create an incentive for the expansion of photovoltaics on roofs.

(Photo: imago images/Shotshop)

Berlin The Federal Environment Agency (UBA) is calling for a radical reform of VAT for reasons of climate protection. To this end, the authority is proposing a “climate and environment relief package”, which UBA President Dirk Messner presented on Thursday.

In essence, it is about aligning the so-called consumption tax more closely with ecological and social criteria. Messner said: “What is environmentally friendly should become cheaper, what is environmentally harmful should no longer be subsidized by the state with taxes that are too low.”

Measures to optimize heating are part of the relief package. “Currently, energetic refurbishments of buildings and apartments are subject to the regular VAT rate of 19 percent,” the paper says. “This can be reduced, but must be at least five percent.”

The new EU Value Added Tax System Directive has provided for this minimum rate since April 2022. The new directive gives the EU member states more room for maneuver in structuring VAT from a social and ecological point of view.

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