Small photovoltaic systems and comparable combined heat and power plants: Option in the absence of an intention to make a profit

In the case of losses, after a certain period of time the tax office questions the so-called intention to make a profit or the intention to generate income. The tax office then checks whether the taxpayer will make a so-called total profit over the duration of the business. A new BMF letter has created a simplification regulation (fiction of hobby) for small photovoltaic systems.

The following photovoltaic systems are eligible:

A photovoltaic system (up to 10.0 kW/kWp installed capacity) or a combined heat and power unit (up to 2.5 kW electrical capacity) is eligible if it was commissioned after 31 December 2003 or more than 20 years ago. The electricity generated must be used for own residential purposes or fed into the public grid. If the electricity is used by a tenant or for own business purposes, the regulation cannot be applied.

Thus, systems located on multi-family dwellings may also be eligible if the relevant requirements are met.

In principle, all photovoltaic systems (and/or combined heat and power plants) of a taxpayer are classified as a single commercial enterprise. When examining the 10.0 kW/kWp limit, all installations of a taxable person must be added together. It is not possible to submit the application for individual installations only.

The application must be submitted to the local tax office. It is not bound to any particular form and can also be sent to the tax office electronically by e-mail. In this way, no profit determination has to be submitted and the system does not constitute a commercial enterprise. At the same time, installation or maintenance costs can only be claimed within the scope of § 35 EStG (German Income Tax Act, article regulates reductions for craftsmen's services).

The application does not apply to turnover tax; here it should be checked in each individual case whether the small business regulation makes sense.

There is no obligation to submit the application. Without an application or proof of the intention to make a profit, the intention to make a profit is to be examined ex officio in the case of permanent losses.

If the taxpayer only makes losses from the operation of the plant, the application does not make sense. If profits are expected in the future and the previous losses have already been recognized with final effect, it is recommended to file this application.