Solar power as an independent service in addition to rental

Whether the supply of electricity from the photovoltaic system on the roof to the tenant is an ancillary service to the rental or an independent main service determines the input tax deduction of the landlord.

Together with the spread of solar systems, the number of landlords who offer their tenants solar power from their own roof is also growing. The important question for tax purposes is whether the electricity is part of the ancillary costs and thus part of the VAT-exempt rental or an independent main service for which VAT is then also due. Only in the second case can the landlord claim input tax from the installation of the photovoltaic system. The contractual agreements with the tenant are primarily decisive.

In any case, the Lower Saxony Fiscal Court - also citing rulings of the European Court of Justice - ruled in favor of a landlord who had separately billed the tenants for electricity supplies and had concluded supplementary agreements with them to the rental contract. According to these agreements, the tenants were free to choose their electricity supplier if they paid the necessary conversion costs for the meter. Although this arrangement made it more difficult to switch, it still left the tenant free to choose, which is why the electricity supply was an independent service, the court said.