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VAT implications of free heat supply from biogas – C-207/23 decision

  • European Court of Justice ruled on free provision of heat
  • Case involved a German partnership generating heat from a biogas plant
  • Partnership claimed 100% VAT deduction for heat generation
  • Majority of heat was provided for free to two businesses
  • Court ruled that VAT must be charged on cost of free heat provision
  • VAT must be calculated based on market price or cost price, including indirect costs
  • Implications for water boards providing free heat from cogeneration plants
  • If VAT was deducted on costs, it may lead to VAT liability for the water board

Source: efkbelastingadviseurs.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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