One week after the German Bundestag, the German Bundesrat has now also voted, in today’s session, on the temporary reduction of VAT on supplies of gas and district heating. With retroactive effect as from 1 October 2022, extending to 31 March 2024, a VAT rate of 7%, instead of 19%, will be applied. This will result in major problems for those gas and heat suppliers affected by it. In response to this issue, the Federal Ministry of Finance published a draft letter on its website on 22 September 2022. This draft letter currently only takes into account supplies of natural gas. Nevertheless, an update is expected shortly regarding district heating. Our KMLZ VAT newsletter provides you with an initial overview of these changes.
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