Renewable energies

Significant growth rates are expected to continue due to technical progress and legal developments in wind energy in particular, as well as in the solar and biomass sectors. The global spread of renewable energies will also continue to increase and thus the market potential will grow due to the limited exploitation of fossil energy sources. Investment volume has steadily increased in recent years, especially for wind and solar parks. Below, we present further information on the individual areas of renewable energies.

Wind energy

Wind energy is increasingly being used to generate electricity in Germany. The construction of both onshore and offshore wind turbines is being steadily expanded. This creates jobs on a large scale in both the expansion and maintenance of wind turbines.

In this context, a wind farm consists of several independent assets. Each individual turbine of the wind farm with cabling and transformer must be treated as a single asset. Furthermore, the accessibility is an independent asset. Finally, the cabling from the transformers to the power grid of the energy supplier, together with the transfer station, also represents an economic asset within a wind farm.

The acquisition or production costs of the assets shown must be ascertained in two stages. At the first level, expenses that can be directly allocated to the individual assets must be treated as their acquisition or production costs. Expenses that cannot be directly allocated must be allocated to the individual assets in proportion to the directly attributable acquisition or production costs.

The start of depreciation must be reviewed separately for each asset. However, the three different components must each be depreciated over a period of 16 years.
For VAT, a change of tax liability to the recipient of the service applies to electricity supplies if both the supplying entrepreneur and the purchaser of the electricity are resellers of electricity. Resellers trade in electricity insofar as the consumption for their own purposes is only of minor importance. As a general rule, the large electricity companies are resellers.

We offer the following services in the field of wind energy:

• Ongoing tax advice and annual audits
• Commercial management including the preparation of payroll and financial accounting
• Preparation of business plans in the run-up to project developments or subsequent financing and follow-up development measures
• Issuance of yield certificates

Solar energy

The sun's energy is available in unlimited quantities and can be converted into electricity without carbon emissions. Solar energy can be generated decentrally by photovoltaic systems, and the generation is extremely environmentally friendly. A photovoltaic system on a property and feeding electricity into the public grid, represents a taxable entrepreneurial status with the intention to make a profit, which constitutes a commercial activity according to the German Income Tax Act.

The acquisition costs of a photovoltaic system include the purchase price of the system excluding VAT plus incidental costs such as transport and inspection costs. These acquisition costs are depreciated on a straight-line basis over a period of 20 years and thus these expenses can only be claimed for tax on a pro rata basis over this period.

For VAT purposes, the sale of the produced electricity into the public electricity grid creates an entrepreneurial status, and this sale must be treated according to the provisions of the German VAT Act (Umsatzsteuergesetz). However, VAT from incoming invoices for the construction and operation of the photovoltaic systems can also be claimed. As a rule, advance VAT returns must be submitted to the competent tax office on a monthly basis.
In the event that the photovoltaic system is operated as a sole proprietorship, a tax burden is only incurred if the profit exceeds EUR 24,500. However, this burden can be offset within the framework of the income tax calculation of the respective year.

We are happy to offer you the following services in this area:

• Preparation of the monthly accounts
• Preparation of the monthly advance VAT returns
• Preparation of the annual determination of earnings and list of investments
• Annual trade tax and VAT returns

Biogas plants

Farmers in particular can tap into a permanent source of income by setting up biogas plants. The amount of the feed-in tariff is regulated by the German Renewable Energy Sources Act (EEG).
In this context, various questions in the area of income and VAT law have to be clarified right from the conception phase of a possible investment, which usually require comprehensive tax advice.

We support you in this area with the following services:

• Ongoing tax advice and annual audits
• Commercial management including the preparation of payroll and financial accounting
• Preparation of business plans in the run-up to project developments or subsequent financing and follow-up development measures