- The Finnish Tax Administration released a preliminary decision on VAT taxation of electricity sales
- The decision involves a company that produces electricity and owns shares in other production companies
- This company sells electricity to its shareholders under the Mankala principle
- Electricity is also sold to an electricity exchange, including sales to two non-shareholder entities
- The company repurchases this electricity and sells it back to the shareholder at market rates
- The company requested clarification on VAT treatment for these transactions
- The Central Tax Board determined that electricity sales to shareholders are taxable activities
- The company is recognized as a taxable entity under VAT law
- The company is entitled to deduct VAT on electricity purchases for its taxable business activities
Source: news.bloombergtax.com
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.
