Germany will temporarily lower gas VAT to 7%

MADRID, 18 Ago. (EUROPA PRESS) -

The German Government will apply a temporary reduction in VAT on gas, which will be 7% instead of 19%, in order to alleviate the cost borne by households and companies as a result of the rise in prices, to which will add from October the new rate set to distribute the increase in fuel prices among consumers.

The German Chancellor, Olaf Scholz, has defended that the temporary reduction in VAT on gas will serve to alleviate the increase in the costs borne by consumers and has expressed his confidence that companies will fully transfer this reduction to the public. "The question of justice is crucial for our cohesion!", He has underlined.

From next October 1, German consumers will have to assume in their bills a new gas rate of 2.419 euro cents per kilowatt hour (KWh) established in order to distribute the increase in fuel costs between households and companies, which which will result in a surcharge of about 480 euros per year per family.

As explained by the German chancellor, the reduction in gas taxation will be in force until March 2024 or the time the new gas rate is applied, so the final relief for consumers will be higher than the surcharge implied by the new assessment.

In this sense, the Federal Association of Energy and Water Industries (BDEW), calculates that the reduction of VAT on gas to 7% would imply, depending on fuel prices, an annual saving of between 378 and 454 euros for a single-family house with a consumption of 20,000 kilowatt hours (kWh) per year, while a house in an apartment block and a consumption of 13,333 kWh per year would save between 252 euros and 303 euros.