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As a result of the Russian war in Ukraine, energy prices have skyrocketed to unimaginable heights. With extensive energy cost relief packages, national governments are trying to mitigate the dramatic effects on their economies and private households. For companies, there is a need for action on various fronts. These measures apply in Germany, Poland, and the UK, for example.
In their article in Cossma, Suzanne Alcock, Managing Director at FTI European Tax Advisory, London, and Natalia Dekert, Tax Advisor at Doradztwo Podatkowe WTS&Saja in Poznan, Poland, give some advice how to work with these challenges and how to benefit from different governmental programms in Germany, Poland and the UK.
Due to the energy crisis, the European Union as well as national governments are implementing various measures to relieve the strain on the economy and help EU industries and citizens to deal with the rising energy prices. Taxes are one of the most effective short-term solutions to the soaring energy prices. In the recent months, the EU has introduced several temporary measures such as a ‘solidarity contribution’ levied on ‘surplus taxable profits’ of companies in the oil, gas, coal, and refinery sectors, as well as a revenue cap on companies generating low-cost electricity from wind, solar, or nuclear sources. In the sections below, we delve deeper into some member states’ national implementation of the EU measures and other national tax mechanisms.
Key recommendations for Germany
In addition to the familiar tax benefits for energy and electricity tax, small and medium-sized enterprises can reduce their energy costs through a variety of new subsidy programs. In the spotlight are the electricity and gas price caps. Companies should pay attention to the specifics of the various application procedures and the relevant deadlines and required evidence.
Key recommendations for Poland
The Polish government has established a programme to assist among others SMEs in the period 2022 – 2024. The various measures that fall under that programme have been explained in the preceding sections. Businesses should first determine whether they are on the list of entities eligible for assistance and whether they meet the requirements listed. Businesses must submit relevant statements and declarations on time for certain relief mechanisms, such as an electricity price cap.
Key recommendations for the United Kingdom
The unit price discounts being provided for non-domestic energy users in the UK from April 2023 to March 2024 are reduced significantly from the level of relief currently available. To address the reducing amount of relief, businesses should explore the range of grants and subsidies available to encourage businesses to invest in energy efficient and low carbon technologies to help reduce the amount of energy used.