Federal government wants to reduce value-added tax on gas

For the duration of the gas levy, the VAT on gas is to be reduced from 19 % to 7 %.

In view of the rise in gas prices, the German government wants to ease the burden on consumers in terms of value-added tax. In the future, the tax on gas consumption is to be 7 % instead of the current 19 %. This reduction is to apply until March 31, 2024 - as long as the gas levy is also charged. This will be levied at a rate of 2.419 cents per kilowatt hour from October 1, 2022, and then readjusted every quarter. In addition to the gas surcharge, a balancing surcharge and a storage surcharge will also be due. The levies will also be subject to value-added tax after the EU Commission rejected the idea of exempting state levies from VAT. It is still unclear whether the VAT reduction will apply only to the supply of gas or also to district heating generated from gas.