Consumption tax is usually incurred when consuming or using excisable goods. Even the smallest violations of compliance regulations during the manufacture, processing, storage, delivery, transport or use of the products often results in taxes being incurred. The high quantities involved in industrial processes mean that significant tax risks can arise.
Consumption taxes include energy tax, electricity tax, alcohol tax, tobacco tax and coffee tax. As chargeable taxes, consumption taxes have a direct effect on the operating result. Consumption tax must also be considered when calculating the prices of goods put on the market.
Consumption tax law provides a variety of tax concessions. In order to qualify for tax exemption or a reduced tax rate, personal individual permits are usually required. Especially for energy and electricity tax, tax relief can be requested for a waiver, refund or compensation of incurred tax, provided that the applicable preconditions are met. This presents significant challenges to the applicant, especially when it comes to calculating and documenting the eligible amounts.
Nonetheless, the handling of energy and electricity tax is often of secondary importance in companies. During investment projects or restructuring measures, the focus is often on other issues. In such cases, not just compliance risks but also efficiency-enhancing and savings potential can go undetected. Furthermore, the dynamic legal developments in the field of consumption tax must be continually monitored. Technological advancements and the increasing integration of renewable energies mean that energy and electricity tax law is constantly evolving.
In this context, the financial authorities regularly initiate penalty proceedings, even for the smallest objections. Alongside monetary sanctions, this can lead to a damaged public reputation and to a default of customer requests for listings, especially when it comes to public contracts.
The EEG surcharge under the renewable energies act (EEG) can generate considerable costs for businesses that consume high levels of electricity.
The Special Equalisation Scheme permits energy-intensive businesses to reduce the EEG surcharge. Our WTS experts assist your company with making the respective applications under the Special Equalisation Scheme. This includes advice in connection with restructuring measures (start-ups, conversions, spin-offs, e.g. the founding of production companies or applying for independent business units), as well as advising on any possible effects of the EEG surcharge capping. We identify and optimise gross value-add as well as electricity cost intensity and carry out risk identification and assessment measures on your behalf, also for self-production projects, lease and facility management models, toll manufacturing models and for proportional leases of a facility. We take care of clarifying any issues with the BAFA (Federal Office of Economics and Export Control) and, if necessary, handle any official and judicial procedures.
Our experts and cooperation partners are also available to assist with auditor certificates for the Special Equalisation Scheme.
Our advice covers all stages of the process chain, from the production of petroleum and the generation of electricity, through to the transport of and trade in excisable goods (such as energy products and alcohol), to the use in industrial processes and the burning of waste as secondary or alternative fuel.
We advise the petroleum industry and refinery operators on all aspects of producing energy products. This includes permits and licences (e.g. tax warehouse permits, manufacturing, registered consignor and consignee, permission for tax-free use), creating procedural instructions for keeping warehouse books, certifying IT processes for warehouse accounting, creating and checking inventory reports, advising on tax inspections and simulating audits using IDEA software, checking the bio-fuel rate and obligations arising from the National Petroleum Stockpiling Agency.
Our WTS consumption tax experts support the petroleum and chemicals trade with all issues arising in the field of logistics and oil storage. In doing so, we ensure that all consumption tax requirements for the transport of excisable products are adhered to. Third-party transactions are also one of our areas of expertise. We also assist with introducing and implementing the EMCS system (electrical movement system for excisable products). Just like your business, our consulting services are international, enabling us to provide holistic advice on cross-border supply chains, taking the applicable customs laws into account. Our services also include process optimisation that incorporates a company's IT landscape to increase efficiency (see also Digitisation).
Our WTS consumption tax experts review all questions relating to the generation of electricity, including special funding for CHP plants and renewable energies, on behalf of energy suppliers, auto-producers, industrial power plant operators and electricity trading. The subject of electricity generation from coal, gas and waste is just as familiar to us as renewable energies such as wind, sun, biomass, water and other power plants. Our areas of expertise include tax relief for power plant operators, energy supply contracts, the use of alternative fuels and operating networks as green networks.
We support companies in the production industry in submitting compliant applications for tax benefits on energy and electricity tax. This includes preparing a description of the economic activity and determining the non-eligible electricity, useful energy and other charges to third parties. For any special questions, e.g. regarding tax benefits for special processing procedures such as mineralogical processes, metal processing and electrolysis, our WTS consumption tax experts are your first point of contact. We also regularly prepare customised instructions for the acquisition, storage, use and distribution of energy products and alcohol.
Our consumption tax experts are also specialists on the subject of alcohol tax (formerly duty on spirits). Due to its high tax rate, the industrial use of alcohol comes with considerable compliance risks. We help with applying for permits as tax warehouse keepers, as registered consignors or consignees, as authorised users of alcohol, or with creating company guidelines for proper handling. We also check whether your company meets the requirements for the tax-exempt purchase of alcohol from abroad, the tax-exempt use of alcohol, as well as for the sale of alcohol.
In addition, our WTS energy law experts are available to help with all issues relating to energy law, such as advising on supply contracts, auto-production concepts, special network charges and the limits of renewable energy law; we are also happy to assist with any related environmental law questions.
According to the application decree of section 153 of the Tax Code (AO) dated 23.05.2016, the introduction of an internal tax control framework to fulfil tax obligations can minimise liability risks for companies and their management as well as ensure protection against potential reputation risks. Besides these preventative functions, the digitisation of processes by the tax ICS also creates greater operational efficiency and presents the opportunity to more closely integrate the tax department into company processes.
When introducing a tax ICS that includes consumption tax, our WTS experts will assist with the needs analysis, conception, implementation and continual development of the system, as well as with the communication with the applicable financial authority.
The digitisation of financial functions and processes is a major trend that has long affected all large companies. It can be assumed that the digitisation of tax functions will ultimately lead to automated end-to-end processes which support both tax compliance and tax consultancy, as well as enable tax reporting at the press of a button.
With respect to consumption tax, the integration of a company's mass data ("big data") as well as automated validation procedures will lead to far-reaching changes. Digitisation can help create greater transparency in company processes and prevent tax risks.
Our WTS experts help integrate consumption tax into your company's existing IT systems. Automated controls will also be implemented in order to meet the requirements of a tax ICS. We are your first point of contact when it comes to checking the compliance requirements of IT systems. We use software programs to evaluate mass data to simulate audits.
Global supply chains and international corporate restructuring measures also require cross-border consumption tax advice. This is why we work with a local expert in almost every country of the world. Cooperation is based on strict quality criteria, long-term partnership and personal contacts. Our international partner companies are united by comprehensive consumption tax expertise, strong client orientation, practical relevance, assertiveness, team spirit and fast response times.
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