Germany is trying to get the EU to agree to the waiver of VAT on the new energy bill levy

German Finance Minister Christian Lindner has written to the European Commission seeking permission to levy Value Added Tax (VAT) on a new gas price levy for a limited period, a copy of his letter seen by Reuters yesterday showed.

The German gas market operator announced today the amount of the levy that Berlin charges all gas consumers in order to spread the additional costs of gas imports.

The levy is intended to help Uniper and other importers deal with soaring prices due to reduced Russian export flows, but it would add to already sky-high energy prices and inflationary pressures for customers.

According to EU law on VAT on energy products, the surcharge is part of the total gas price, i.e. it is mandatory, which is why Germany has to ask Brussels for permission to waive it.

Mr Lindner said while asking on behalf of Germany he was effectively calling for an amendment to the VAT law that would give all member states a temporary opportunity to take similar steps.

Mr Lindner’s English-language letter of August 12 said Germany would later formally apply to the EC, but before doing so, he wanted to appeal to Brussels to persuade authorities that policymakers were concerned about possible hardship and resentment.

“VAT on state taxes is driving up prices and is encountering increasing resistance from the population, especially in the current exceptional situation,” he said.

“However, the acceptance of tax laws by the population is crucial for their enforceability,” it said.

Meanwhile, Germany’s gas storage facilities were just over 75 percent full on Friday, a few weeks short of target, data from European operator group GIE showed yesterday.

Germany has 23.3 billion cubic meters (billion cubic yards) of underground gas storage, just over a fifth of the 100 billion cubic meters of gas that will be consumed in 2021.

The Rehden storage unit, which holds 4 billion cubic meters, was 54 percent full, GIE data showed.

Germany is in phase two of a three-stage contingency plan formulated following a reduction in gas flows from Russia. This is a major headache for German industry, which covers a quarter of Germany’s gas needs. Germany is trying to get the EU to agree to the waiver of VAT on the new energy bill levy

Fry Electronics Team

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