AADE: What you need to know about the heating allowance credited to your energy bills

The Independent Authority for Revenue (AADE) has clarified the VAT charge on heating allowances on electricity bills in a new circular regarding electricity suppliers.

The purpose of AADE is to promote a uniform approach to the treatment of heating surcharges in energy bills. The agency thus clarifies that the taxable value is the consideration received or receivable for those transactions by the supplier of goods or service provider from the buyer, recipient or third party, plus any benefit directly attributable thereto.

Taxable value includes: interest on credit sales, as well as incidental expenses incurred by the supplier to the buyer of goods or recipient of services, such as commission, brokerage, packaging, insurance, transportation, loading and unloading, even if these are the subject of a special agreement.

Besides to taxable value turn on: taxes of any kind, duties, fees, contributions, payments in favor of the state or third parties and stamp duties, with the exception of the tax provided for by this law. On the contrary, the taxable amount don't turn on discounts provided to the buyer or recipient, including turnover discounts.

In addition, as AADE notes, the administrative order specifies the recipients of the heating subsidy, the period of the subsidy, the criteria for granting, the amount and procedure for providing the subsidy to recipients.

Provides: “Heating allowance is available to single, married or widowed individuals, as well as cohabiting, separated or divorced individuals who consume electricity to heat their main residence and who meet the criteria set out in Article 2.” .

According to the decision, to provide heating benefits, data from municipalities and settlements of the Greek territory are used, based on the calculation of gradients, which are an indicator of the severity of the climate of a particular area and are taken into account when calculating the heating load of a building and the energy consumption required for its heating.

In addition, the total amount of debt is not transferred to a bank account, but is issued to the beneficiary on a counter- or settlement account issued by the supplier representing or representing it in the electricity consumption related to the period of application of the measure.

It follows from the above that crediting the amount provided as a heating benefit to the electricity bill implies a reduction in the cost of electricity consumption and, therefore, a subsidization of the price of electricity consumption (i.e. accrued kilowatt-hours), and not a reduction in the amount payable in your electricity bill.

It is clarified that from a VAT point of view, the above heating allowance, as a price subsidy, is treated in the same way as Energy Transition Fund subsidies with a credit entry, i.e. with a separate entry of the cost and VAT on the account of the client receiving the subsidy, and issuance of an invoice by the supplier with VAT to the limited liability company “Operator of Renewable Energy Sources and Guarantees of Origin”.

It is also noted that settlements are not made in the form of a cash contribution, which is closed by a cash transaction/receipt. The applicable rate in the published data for calculating the above heating allowance is the 6% rate applied to the supply of electricity and is calculated by internal deduction from the amount payable as defined in the above CBA for each category of beneficiaries.

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