Germany’s sawmill industry is celebrating a win against onerous Federal government plans to change the sales tax rate for woodchips.
The German Sawmill and Wood Industry Association (DeSH) and the Wood Energy Association of the German Bioenergy Association (FVH) released an announcement saying the German Federal Ministry of Finance had withdrawn the sales tax changes after their lobbying. There will now be no VAT changes to woodchips.
“In light of the reduction in bureaucracy, it is important that no new hurdles are created for companies,” said Julia Möbus, managing director of DeSH. “We remain happy to work with the Federal Government in the future to develop long-term, sustainable and implementable solutions.”
Gerolf Bücheler, managing director of the FVH, said the “impractical” regulation has caused considerable uncertainty among suppliers and buyers of wood chips.
“The back and forth on the VAT rate must now come to an end. Companies need planning security and not monthly new tax rate regulations with tight implementation deadlines.”
The Federal government issued a notice in April that, as of June 1, wood chips used as firewood will only be subject to the reduced tax rate of 7% if they fall under customs tariff number 4401 and demonstrate a specific type and presentation upon delivery and sale, comply with a predetermined “degree of dryness” (> 25%), and are intended for heating public or private premises.
FVH and DeSH had fundamentally criticized the Federal Ministry of Finance plans, particularly criticizing the practicality of the moisture content, as well as the restriction to use for heating rooms.
With the withdrawal of the planned new regulation, the tax rate of 7% now generally applies to wood chips again, unless the type of packaging or the quantity sold indicates that they are not intended for combustion.
