Reduced sales tax on gas

The Bundestag and Bundesrat have approved a reduction in VAT on gas and district heating as well as tax exemption for inflation compensation premiums paid by employers.

One week after the Bundestag, the Bundesrat also approved the temporary reduction in VAT on gas supplies at the beginning of October. In a special session of the Finance Committee in the Bundestag, the latter had previously decided to include district heating in the tax reduction. From October 1, 2022 to March 31, 2024, VAT on the supply of gas via the natural gas network and heat via a heating network will therefore only amount to % instead of %. Companies are to pass on the reduction in full to consumers. The supply of gas via other distribution channels, e.g. tankers or cartridges, will still not be taxed at a reduced rate. The Amendment Act also enshrines the previously announced tax-free inflation compensation premium in law (see separate article on the inflation compensation premium).