Entities considering the use of power generators as part of their operations often forget about the related excise tax consequences . Often, entities do not even realize that the consumption of self-produced electricity in generators gives rise to any obligations under the excise duty. It should be noted, however, that in accordance with the provisions of the Act on excise duty, excise duty is subject to, inter alia, consumption of electricity produced by an entity without a license issued under the provisions of the Energy Law. At the same time, it should be emphasized that not always starting a power generator and consumption of the energy produced in it will be associated with the obligation to actually pay the excise duty.
The excise regulations provide, under certain conditions, for the possibility of applying the excise duty exemption to electricity consumed from generators with a total capacity not exceeding 1 MW.
Source Deloitte
