Proper settlement of the sale of energy surplus from own photovoltaics still raises many doubts. Referring to this issue, we will analyze the relevant provisions of the PIT and CIT acts and try to answer the question of whether the sale of energy generates taxable income.
Settlement of the sale of energy surplus from photovoltaics – general principles
Firstly, let’s explain that since April 1, 2022, the mechanism of net-billing applies to the settlement of electricity generated by photovoltaic panels. Net-billing is a cost-based settlement based on the value of energy purchased and delivered. This means that prosumers will sell the surplus energy fed into the grid at a specified price, and for the energy consumed, they will pay like other consumers.
Let’s recall that a prosumer is an entity that produces electricity from renewable energy sources for its own use. Prosumers therefore generally produce electricity to meet their own needs. At the same time, there may be situations where the volume of electricity produced by a prosumer exceeds their consumption or situations when the amount of energy produced and fed by a prosumer is less than the amount of energy drawn from the grid.
Net-billing assumes that money from the sale of the energy surplus from photovoltaics will be kept in a deposit for a period of 12 months. Thanks to this, the prosumer will be able to pay for the consumed energy. We refer to this deposit as a prosumer deposit.
Settlement of the sale of energy surplus from photovoltaics and the prosumer deposit
For both PIT and CIT taxes, the essence of taxation boils down to income, which is a certain increase in wealth leading to an increase in the taxpayer’s assets. This rule applies to both private individuals and taxpayers engaged in business activities. The difference lies only in the moment of such income arising, because for taxpayers engaged in business activities, income consists of amounts due, even if they have not been actually received.
Based on this, it can already be assumed that the introduction of electricity into the grid and receiving a prosumer deposit in return does not constitute a permanent and definitive gain, because at this stage it is still unknown how the electricity will be settled (the funds remain in the deposit for 12 months).
In addition to purely theoretical considerations, we can also point out specific regulations.
According to Art. 2 clause 1 point 9 of the PIT Act, the provisions of the Act do not apply to incomes resulting from the settlements of renewable energy produced by the prosumer, collective renewable energy prosumer, and virtual renewable energy prosumer, as referred to in Art. 4 clause 11 point 2 of the Renewable Energy Sources Act.
As a result, in terms of PIT tax, incomes from the produced surplus electricity have been explicitly excluded from taxation. According to the wording of Art. 2 clause 1 point 9 of the PIT Act, this provision concerns incomes resulting from the settlement of energy produced by the prosumer. Its scope is therefore not limited, for example, only to the overpayment received by the prosumer due to not utilizing the funds from the prosumer deposit within the following 12 months.