Claiming back the VAT on your solar panel system

Claiming back the VAT on your solar panel system

What steps do you need to take in order to receive the 21% tax you paid on the installation?

Claiming back the VAT on your solar panel system

Claiming back VAT on your solar energy system

Owners of solar panel installations can claim the 21% VAT on the purchase of their system back from the Tax Office. Zonnefabriek is happy to assist you in the steps you need to take.
First: Why do you have a right to get the VAT back?
  • Every person who sells something to someone else, is a business owner in the eyes of the law. Just like a baker who invests in an oven, which he uses to bake bread. If he sells the bread to other people, he’s a business owner
  • The baker has to add the VAT to the price of the bread he sells, and give that VAT to the tax office
  • On the other hand, the baker can claim back the VAT that he paid on the oven, and on other things he invested in for his business. At the end of the tax year he files his VAT returns with the tax office, including the VAT he owes and the VAT owed to him
  • It works the same way for you if you invest in a solar panel system. You will then produce something (electricity) which is sold to someone else (the energy supplier). Even though some of the electricity is consumed on-site, there is usually some electricity that flows back to the grid, for which you receive money in return.
  • That’s why you will be regarded as an entrepreneur with your own business if you have solar panels. A business owner is supposed to pay VAT over the commodity he or she sells (the electricity), and can claim back VAT over the investment required to produce that commodity (the solar panel installation

How does claiming back the VAT on solar panels in the Netherlands work in practice?

If you want to be registered as a business owner and therefore be able to claim the 21% VAT back, you’ll need to get a VAT-number from the tax office. Using that number you can do your tax returns, declaring the VAT on the electricity you ‘sold’ and on the investment in solar panels that you bought.

The VAT amount you spent is easy to calculate: It is simply the 21% VAT you paid on your installation. But the amount of VAT you received from your ‘customer’ (i.e. your power supplier) depends on how much power you ‘sold’ to them over the course of the year. And figuring out exactly how much power you fed back into the grid and calculating the VAT over that amount is a bit complicated. Just like it is complicated for the tax office to check the numbers.

That’s why the tax office has decided to use an estimation of the amount of VAT you would have received, based on the installed power of your solar system. The estimation is called the ‘forfait’, and it is different for the ‘normal’ solar panels which are installed on top of the roof, than for integrated panels which are installed within the roof. In the table below you can see the ‘forfait’ for panels installed on top of the roof.

Installed Power in Watt-peak                                                                 

Forfait

0 – 1000

€20

1001 – 2000

€40

2001 – 3000

€60

3001 – 4000

€80

4001 – 5000

€100

5001 - 6000

€120

6001 - 7000

€140

7001 - 8000

€160

8001 - 9000

€180

9001 - 10.000

€200

In theory you would have to file a VAT declaration for every year that you sell power to the grid, and pay the ‘forfait’ to the tax office. But for the tax office, the money they would receive doesn’t weigh up against the added administrative burden, so that’s why they invented the Small Businesses Regulation, or ‘Kleine Ondernemers Regeling’ in Dutch, which is abbreviated to KOR. According to the KOR you don’t have to declare the VAT if the amount is too low, so that’s why you would only declare your VAT in the first year, receiving the 21% VAT on your installation costs, minus the ‘forfait’ you owe. In the following years you would be exempt of paying the ‘forfait’, thanks to the KOR.

What are the steps to take in order to get the VAT on solar panels back?

Firstly, as stated above, you’ll need to get a VAT number from the tax office. If you already have a VAT number because you have your own business, whereas your partner doesn’t, then it may be a good idea to register your installation in your partner’s name. In that case your partner should get their own VAT number, and you should make sure that your contract with your power supplier is also made out in your partner’s name.

On the tax office’s website (www.belastingdienst.nl) you can fill out a form (in Dutch) to take care of everything. However, you can also choose to let someone else take care of all the bureaucratic stuff. To this end, Zonnefabriek has partnered up with the VAT specialists at zonnepanelenbtw.nl. For only € 100 (ex VAT) they will take care of the whole administrative process for you. Just ask our solar consultants and they’ll help you get in touch with them.

Does the VAT claim on solar panels always work in the same way?

No: there are a number of cases in which the rules are (slightly) different. We’ll list them for you here:

1) The cost of your installation exceeds € 11.900 ex VAT

The tax office will only grant you an exemption to declaring VAT if the amount you receive back is less than € 2.500,= . If the VAT amount you want to claim back is more than € 2.500,= , then the tax office requires you to file a VAT declaration for at least 4 more years after the installation.

In the first year you will receive the VAT on your installation back, minus the ‘forfait. In the following four years, you will have to declare and pay the ‘forfait’. After 5 years are over, you can request that the KOR be applied and from then on you will be exempt from filing VAT declarations.

2) Your solar panels are mounted as an ‘in-roof’ system rather than on top of the roof

In an 'in-roof' solar system the panels double as roof surface

In an 'in-roof' solar system the panels double as roof surface

In an ‘in-roof’ or ‘building integrated’ PV system, the solar panels have a two-fold function; they keep the rain out, like any normal roof, plus they produce power. Since you would only get VAT back for the power producing part, you cannot claim the VAT on the total investment costs back. The tax office has decided that for ‘in-roof’ systems you can only get 1/3 of the VAT back.

The ‘forfait’ is also calculated differently in the case of ‘in-roof’ systems. The tabel below shows you the ‘forfait’ you must use for ‘in-roof’ systems.

Opwekvermogen in Wattpiek                                                                  

Forfait

0 – 1000

€5

1001 – 2000

€10

2001 – 3000

€20

3001 – 4000

€30

4001 – 5000

€40

5001 - 6000

€50

6001 - 7000

€60

7001 - 8000

€70

8001 - 9000

€80

9001 - 10.000

€90

3) Your system is larger than 10 kWp

If the power of your solar panels exceeds 10 kWp, you can’t use the ‘forfait’. In those cases you must register exactly how much electricity was fed into the grid and use that figure for your VAT returns.

4) You already have a VAT number

If you already are a business owner with your own VAT number, then you would have to declare the VAT from your solar system together with the other VAT declaration. If the total turnover from your business remains below € 20.000 , then you can still make use of the KOR.

If you are living together with a partner who doesn’t have their own VAT number, then it’s usually convenient to put the system under their name and follow the standard procedure.

5) The PV installation is an addition to an existing system

If you make use of the KOR, then there is a minimum period of 3 years in which you are bound to it. That means that during this period you cannot claim back VAT on a new PV system, or on the expansion of your current system. Only after 3 years you can opt out of the KOR and do a new VAT claim.

In order to opt out of the KOR you need to fill out a de-registration form, which is also available on the website of the tax office (www.belastingdienst.nl)

You can find more information on these special cases (in Dutch) on the website of our VAT partner: www.zonnepanelenbtw.nl