The federal government has announced that this reduced rate will apply at least until the end of March 2024.
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Posted on 08/18/2022 3:47 PM Updated on 08/18/2022 3:55 PM
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Help for German households with rising energy prices. The government has decided to temporarily reduce VAT on gas from 19% to 7% to help consumers, the German Chancellor announced on Thursday 18 August. This reduced rate applies at least until the end of March 2024 and “we expect that the companies will pass this discount on to the customers 100%”, adds Olaf Scholz.
This announcement comes at a time when bills are set to rise significantly from October 1st, the date when gas distributors will be allowed to pass the purchase price increase on to customers. Companies can therefore demand an additional special fee of 2.4 centimes per kilowatt hour (KWh) of gas from private individuals and companies.
Including VAT, for an average household with two children and a consumption of 20,000 KWh, this is around 600 euros more per year. The coalition government wanted to completely exempt this levy from VAT, a measure rejected by the European Commission. Berlin has therefore decided to reduce the tax on all gas consumption, which relieves consumers “more” than the special levy costs, Olaf Scholz assured.
The Chancellor also reaffirmed the promise of a new aid package “to reduce the pressure on private individuals and companies”. Germany has already provided aid totaling 30 billion euros, including discounts at the petrol pump and the 9-euro ticket that allows public transport until the end of August and regional trains for a month.