To simplify administrative procedures, profit-making intent is now waived for certain photovoltaic systems and combined heat and power units. Without profit-making intent, no income from a trade or business (§ 15 EStG) is generated, and the preparation of an income-surplus statement is no longer required. In many cases, the effort required to prepare and review such a statement outweighed its actual benefit.
Which systems are eligible to apply?
The following operators may apply for the simplification rule:
- Photovoltaic systems with an installed capacity of up to 10 kW/kWp
- Combined heat and power units with an installed capacity of up to 2.5 kW/kWp
All taxable persons are eligible to apply, as are co-entrepreneurships. The photovoltaic systems and combined heat and power units operated by the applicant constitute a single business, meaning that the output of all systems must be aggregated. This unified treatment applies to systems located on a single property as well as to systems on different properties. Whether the systems are technically separate is irrelevant. Photovoltaic systems with an installed capacity exceeding 10 kW/kWp are not eligible, even if their output is limited to 70% of installed capacity under § 6 Abs. 2 Nr. 2 EEG 2012 and their actual output therefore falls below 10 kW/kWp.
Time-related conditions
- Systems put into operation after 31.12.2003
For new systems commissioned after 31.12.2021, an application may be submitted in the year following commissioning. For existing systems commissioned before 01.01.2022, an application may be submitted until the end of 2022.
- Systems put into operation before 01.01.2004
For systems commissioned by the end of 2003, the feed-in tariff under § 21 Abs. 1 Nr. 3 EEG must be taken into account. An application for waiver of profit-making intent may therefore only be submitted after the 20-year subsidy period has ended — specifically in the year following the final payment of the feed-in tariff.
Consideration of electricity use
The use of the generated electricity is a key factor in determining eligibility. As a general rule, only operators who use the electricity exclusively for their own residential purposes (in addition to feeding it into the grid) are eligible to apply. Consumption in a private home office does not affect eligibility. Photovoltaic systems and combined heat and power units operated by co-entrepreneurships are eligible if at least one co-entrepreneur uses the electricity for private residential purposes in addition to feeding it into the grid. Consumption by a tenant (rental income in the assessment period exceeding €520) or for other business purposes — whether the operator's own or those of third parties — is detrimental to eligibility.
Consequences of the simplification rule
Upon approval of an application submitted to the competent tax office, profit-making intent is waived. As a result, no further income from a trade or business (§ 15 EStG) is generated, and Annex G no longer needs to be completed for the photovoltaic system or combined heat and power unit. However, this rule applies not only to the current year but also to past and future years. Before submitting an application, it should therefore be considered whether tax assessments for prior years have already become final or whether losses from operating the system can still be claimed.
The waiver of profit-making intent releases the taxpayer or co-entrepreneurs from the obligation to prepare an income-surplus statement, but not from the VAT obligations associated with a photovoltaic system or combined heat and power unit.
Frequently asked questions
Frequently asked questions
Which photovoltaic systems and combined heat and power plants can waive the profit-making intention?
Eligible applicants are operators of photovoltaic systems with an installed capacity of up to 10 kW/kWp and combined heat and power plants of up to 2.5 kW/kWp. All taxable persons as well as co-entrepreneurships qualify. Multiple systems operated by the same person are treated as a single business, meaning their capacities are aggregated regardless of whether they are located on one or several properties.
What are the tax consequences of waiving the profit-making intention?
Once the application is approved, no further income from business operations under § 15 EStG is generated, eliminating the need for an income-surplus statement and Annex G. This treatment applies not only to the current year but also to prior open and future assessment periods. VAT obligations, however, remain unchanged.
By when must the application to waive profit intention be submitted?
For existing installations commissioned before 01.01.2022, the application can be filed until the end of 2022. For new installations from 01.01.2022 onwards, the application can be submitted in the year following commissioning. For installations commissioned before 01.01.2004, the application is only possible after the 20-year EEG funding period has expired.
What electricity usage is required for eligibility?
Apart from grid feed-in, the generated electricity must be used exclusively for the owner's own residential purposes; use in a home office is not detrimental. For co-entrepreneurships, it is sufficient if at least one co-entrepreneur uses the electricity for private residential purposes. Detrimental, however, is electricity consumption by tenants generating rental income exceeding €520 in the assessment period, or use for the owner's or third parties' business purposes.
What should be reviewed before applying for a waiver of profit intention?
Since the rule also applies retroactively, you should check whether tax assessments from previous years are already final or whether losses from operating the system could still be claimed. Once the waiver is granted, no commercial income exists, so previously unused losses may be forfeited. A careful weighing of the simplification benefit against potential tax disadvantages is therefore advisable.