In the period from 1 July 2022 to 31 December 2022 the reduced VAT rates applies to the supply of natural gas, district heating and electricity. We informed you about this earlier. In this article we inform you about the right to a VAT refund for the energy supplier that arises when a discount is granted on the supply of energy.
VAT refund claims and discounts
Energy suppliers regularly grant welcome or transfer discounts to customers when concluding contracts. The settlement of these discounts can take place at various times. For example, at the start of the contract, at the end of a period of use or throughout the whole contract period. When a (partial) discount or price reduction is granted for the supply of energy, the energy supplier is entitled to a VAT refund with respect to the VAT included in the discount. Does the discount relate to both the period in which the general VAT rate of 21% applies and the period in which the reduced VAT rate of 9% applies? This would mean that energy suppliers, in order to be entitled to a VAT refund, would have to divide the discount over a period in which the general VAT rate applies and a period in which the reduced VAT rate applies. According to the Dutch State Secretary this would result in a disproportionate administrative burden for these entrepreneurs.
Practical solution
To relieve entrepreneurs from this administrative burden, the Dutch State Secretary approves that energy suppliers that grant (partial) discounts for supplies that partly relate to the period in which the reduced VAT rate applies, do not have to make a distinction between the different rate periods in order to claim a VAT refund. In our opinion this is a very welcome and practical solution for energy suppliers. For a VAT refund relating to (partial) discounts, the VAT rate applicable at the time when the contract containing the discount or partial discount was concluded may be used as the basis for the right to a VAT refund. However, two conditions must be met to apply the approval:
- The energy supplier must apply the same policy to all contracts, and;
- If the entrepreneur decides to apply the approval, he is bound by this choice until the end of the contract in which the discount is provided.
More information?
Do you have questions about the aforementioned approval and application in your situation? Then please contact one of our VAT advisors. We are happy to help you!