Excise duty on electricity. Issues raised by several electricity producing entities
Binding tax ruling V4225-16, issued by the Spanish General Excise Duties Sub-directorate on October 3 of 2016.
The consultant entities own each, a photovoltaic solar plant of rated power of 100 kilowatts (kW) that are part of a grouping of 1.5 megawatts. The greater part of the energy produced in the plants is sold to a distributor entity and the rest is intended to the consumption in their own photovoltaic facilities for the generation of the electric energy. These entities want to know the tax treatment for the purpose of the excise duty on electricity, for the part of electricity that has been generated and is consumed by themselves.
It is important to know that the excise duty on electricity is an indirect tax that taxes the consumption of electricity and let set up as a tax on the production of it, to become a tax whose taxable event taxes both the supply of electricity made to an individual or entity that purchases electricity for its own consumption, as well as the consumption by the producers of electric energy of that electricity generated by themselves.
The entities asked about the following questions:
1 Are they carrying out some of the taxable events regulated in the electricity tax and, therefore, they are considered as taxpayers for purposes of this tax?
According to article 92.1 of the Spanish Excise Duties Law, shall be subject to tax:
a) The supply of electric power to a person or entity that purchases electricity for its own consumption.
b) Consumption by the producers of electric energy of that electricity generated by themselves.
In connection with the supply of electricity made by the consultants to a distribution company, the consultants are not carrying out any taxable event, this would occur if the electrical energy is supplied directly to a person or entity that purchases electricity for its own consumption.
On the other hand, although with respect to the consumption by the consultants of the electricity produced in their facilities it is considered as taxable in the letter b) of paragraph 1 of article 92 of the Spanish Excise Duties Law, however, should be noted that article 93 of the same Law establishes that shall not be subject to tax the consumption by generators or set of generators of capacity not more than 100 kilowatts (kW) of electricity produced by themselves.
However, although consultants own, each, a photovoltaic solar plant of rated power of 100 kW, they belong to a generator field of photovoltaic modules connected to each other with total power is 1.5 MW.
Therefore, since the total power of the generators that make up the grouping photovoltaic is higher than 100 kW, the consultants are subject to the electricity tax.
I.e., the consultants, shall be tax payers on electricity tax due to the fact that they consume the electricity generated by themselves.
2. In the case of being considered as taxpayers, must the companies carry out any communications to the Spanish Tax Authorities?
Due to their condition of taxpayers on the electricity tax, the consultants are obliged to communicate this issue to the Spanish Tax Authorities and also to get an Electricity Identifying Code (CIE).
3. Are the entities obliged to submit the Spanish Electricity Tax (560 form) or any other related excise duty on electricity?
Yes, the consultant entities are obliged to submit the corresponding Spanish Electricity Tax (560 form). The submission of said tax forms should be done on a quarterly basis; unless for the tax payers that are obliged to submit their VAT returns on a monthly basis, in which case the period of payment of this tax is also monthly.
Additionally, the consultant entities must also submit an informative form, however, currently it has not been approved, by what the consultants only would be obliged to submit the mentioned Spanish Electricity Tax (560 form).
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