VAT exemption for photovoltaic systems from 2024

The VAT rate for the supply of photovoltaic systems is currently 20%. Entrepreneurs within the meaning of the Value Added Tax Act can generally claim the VAT charged as input tax, but corporations not subject to VAT and private individuals not engaged in business activities must bear the VAT in full. In 2024, the VAT rate for the supply of photovoltaic modules will be reduced from 20% to 0% under certain conditions. The regulation applies to supplies, intra-Community acquisitions, imports and installations of photovoltaic modules from 1.1.2024 and before 1.1.2026.

The greening of tax law is one of the cornerstones of the government's programme. With the VAT exemption for photovoltaic systems, Austria is taking an important step towards green taxation and creating a clear incentive to switch to renewable energy sources.

Alexander Stieglitz, tax expert and local partner at Mazars Austria

Requirements

The 0% VAT rate is only applicable if the bottleneck output of the photovoltaic system is or will be no more than 35 kilowatts. Furthermore, the system must be operated on or near the following buildings:

• Buildings used for residential purposes
• Buildings used by corporations under public law or
• Buildings used by corporations, associations of persons and property funds with charitable, benevolent or ecclesiastical purposes.

Assembly and installation of photovoltaic modules

A photovoltaic system is considered to be located in the vicinity of the above-mentioned buildings if it is located on the same property, on garages, sheds or a fence, for example. The proximity of the system is also to be assumed if there is a spatial connection of use between the property and the system (e.g. uniform building complex).
Independent ancillary services which are necessary for the recipient of the supply in order to operate the system are covered by the tax exemption to the same extent as the supply. The assembly or installation of photovoltaic modules, for example, constitutes such an ancillary service. Installation work must be provided directly to the system operator in order to be subject to the 0% tax rate. However, work that also benefits other electricity consumers, electricity producers or other purposes will not be subject to the preferential rate.

No additional land sealing

The tax exemption only covers supplies directly to the operator for the purposes of the business. Supplies and services provided by intermediaries, on the other hand, are still subject to the standard tax rate. Operators of a photovoltaic system are those persons who operate the system from an economic point of view. The mere ownership of a photovoltaic system is not decisive and is therefore only indicative at best.
To ensure that the temporary VAT exemption for small photovoltaic systems on private houses or public buildings does not lead to additional land sealing, only those systems that are installed on the roof of a house or a nearby building such as an existing garage or shed - but not on an open area - will be tax-privileged.