The push for a green economy and the recent instability in electricity prices in Slovakia have inspired many entrepreneurs to consider investing in photovoltaic panels. These panels allow businesses to produce a portion of their electricity on-site under more favorable conditions. Subsidy schemes for purchasing these panels have made them accessible even to small and medium-sized enterprises, leading to growing popularity and availability among a wider group of entrepreneurs. However, it’s important to note that operating photovoltaic systems can lead to new tax obligations related to the excise tax on electricity, outlined below.

Who is liable for the green electricity tax?

A person generating electricity from renewable sources is liable for the excise tax on electricity.

Is registration for excise tax mandatory for green electricity producers?

Yes. Entrepreneurs producing electricity from renewable sources must register for the excise tax on electricity at the relevant Customs Office. Registration requires submitting an electronic registration form with the required details. The Customs Office will verify these details through an on-site inspection. If the submitted information is accurate, the office issues a registration decision within 30 days of receiving the application.

What is needed for the on-site inspection?

During the inspection, which is part of the registration process, the tax administrator will check project documentation, such as the number of panels, their capacity, and records of electricity production since the system’s commissioning. This production data may also be accessed via the photovoltaic panel manufacturer’s application.

Are there exemptions from registration?

Yes. To encourage renewable energy production, reduce environmental burdens, and enhance Slovakia’s energy security, as of January 1, 2025, the threshold for small energy sources will increase from the current 10 kW to 50 kW. Producers generating electricity in facilities with a total installed capacity of up to 50 kW are exempt from registering for the excise tax on electricity. Additionally, such consumed electricity is tax-exempt. From 2025, administrative burdens will also be reduced, as producers of small energy sources will no longer need to prove the origin of the electricity but can claim the exemption based solely on the source’s capacity.

Is proof of registration required for suppliers?

Yes. Electricity tax payers must present their registration certificate to every electricity supplier before their first purchase. Suppliers cannot provide untaxed electricity without proof of registration.

What are the benefits of generating your own green electricity?

Electricity produced from renewable sources, as proven by a guarantee of origin, and electricity from solar systems, wind farms, geothermal, hydropower, or biomass facilities is exempt from excise tax on electricity.

When does the tax obligation arise, and what is the tax period?

The tax obligation arises when electricity is delivered to the final consumer or consumed by an electricity company. For this purpose, even entrepreneurs without energy business licenses, who generate or distribute electricity for their use, are considered electricity companies. Tax obligations do not apply to green electricity production or supply to another tax payer (provided the registration certificate is presented).

The tax period is a calendar month. Tax returns must be filed and the tax paid by the 25th day of the following month. If the tax obligation does not exceed €5, no return or payment is required.

How is the tax base determined, and what is the rate?

The tax base is the amount of electricity in megawatt-hours (MWh). The tax is calculated by multiplying the tax base by the applicable tax rate, which is €1.32/MWh.

Does trial operation of panels incur taxes?

Yes. Even during trial operation, the production and consumption of green electricity are subject to taxation.

Is the registration certificate required on the first day of trial operation?

No. On the first day of green electricity production, the registration certificate does not need to be available. However, a registration application must be submitted before production begins, which will be verified by the tax administrator.

What are the administrative obligations?

Tax payers must maintain ongoing records of electricity in megawatt-hours for:

• Production,
• Procurement,
• Delivery, including:
• Sales,
• Tax-exempt purposes other than delivery to households,
• Tax-exempt purposes for households,
• Final consumption,
• Self-use,
• Use for electricity production and operational maintenance, including losses during transmission or distribution.

What if you’re already registered for the electricity excise tax and operate a small source up to 50 kW?

If you previously registered because your source exceeded 10 kW but its capacity is up to 50 kW, the tax exemption will apply from 2025. In this case, you can request the Customs Office to cancel your registration by December 20, 2024. The registration will expire on December 31, 2024.

For those considering investing in green electricity production and seeking more information, our tax experts are happy to provide consultation in this area.

Barbora Juhásová

Tax Manager | Accace Slovakia

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