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Written by:
Bas Hollenberg


Solar panels lead to entrepreneurial status for value-added tax purposes

Entrepreneurs have the right to deduct input tax for any services and/or products they procure for use in connection with such of their business operations as are liable for value-added tax, which input deduction right they must exercise within the period of their having been invoiced by the relevant suppliers for the (value-added tax on the) relevant services and/or products. The European Court of Justice in 2013 decided that any owner of solar panels who backfeeds power into the grid for valuable consideration should be acknowledged as having entrepreneurial status for value-added tax purposes and should therefore have the right to deduct the value-added tax component forming part of the purchase price paid for the solar panels in question. 

Deadline for filing request for rebate

The majority of entrepreneurs submit their value-added tax returns at quarterly intervals. As this is required to be done within one month of the end of the trimester to which the return in question relates, it is only logical that the same filing deadline should apply to rebate requests. Tax return forms will be made available to those whose names are on record as entrepreneurs.

The current turnover tax regime provides for a three-month rebate request filing deadline (with effect from the closing date of the period to which the value-added tax payment in question related) for those who have not (yet) been acknowledged as having entrepreneurial status. Rebate requests may also be filed by letter addressed to the Tax and Customs Administration.

Entrepreneurial registration

The Tax and Customs Administration does not process any requests for entrepreneurial registration it receives with retroactive effect, or does not at least backdate these any further than the date as at which the relevant request for registration was submitted. It will not as a rule hand out tax return forms relating to periods predating the date of registration. 

Sticking point

Value-added tax rebates are not always smooth sailing. Things tend to go awry where the tax payer in question, having submitted a request for registration as an entrepreneur, goes on to wait for his request to be processed instead of instantly petitioning for a rebate. Once the rebate request deadline has been missed, no district court will uphold an appeal against the Tax and Customs Administration’s rebate refusal unless the petitioner demonstrably made enough of an effort to ensure that his right to deduct input tax should be validated, for example by submitting his rebate request at the time he registered as an entrepreneur. 

N.B.: Anyone who is interested in backfeeding power into the grid using solar panels would be well-advised to register as a fledgling entrepreneur before purchasing the actual panels.


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