European state accrued 15 billion euros from energy value-added tax
Germany's approach to reducing energy costs for private households has primarily focused on subsidies, grid fee caps, and tax exemptions, rather than lowering Value-Added Tax (VAT) rates for electricity, gas, heating oil, or petrol.
In the first pandemic year of 2020, the state collected approximately 15 billion euros in VAT on energy for private households. However, as of August 2025, there have been no current or planned VAT rate reductions for these energy sources.
Instead, energy cost relief is mainly focused on capping electricity grid fees through subsidies worth billions from 2026 onwards, administered via the Climate and Transformation Fund (KTF). This measure is intended to reduce electricity costs for all customers by lowering the grid fees included in their bills, although VAT rates remain unchanged.
Previously, the Federal Government had announced that the VAT revenues from liquid fuels such as oil amounted to 0.8 billion euros, while VAT revenues from electricity amounted to 6 billion euros and from gas to 2.7 billion euros. Notable measures in 2022 included temporary tax cuts on fuel prices and the elimination of the EEG surcharge on electricity from July 2022.
Dietmar Bartsch, the parliamentary group leader of The Left, has been a vocal advocate for a temporary reduction in the VAT rate on electricity, gas, heating oil, and petrol. He has suggested that if the Finance Minister does not act, he is effectively increasing taxes through inaction on energy cost reductions. Bartsch has also criticized the possibility of the Finance Minister balancing his budget with the warm shower and warm home of the citizens, implying that energy cost increases could be used to balance the budget.
To summarize, Germany's efforts to reduce energy costs focus on subsidies, grid fee caps, and tax exemptions like EEG surcharge elimination, rather than on lowering VAT rates for electricity, gas, heating oil, or petrol. As of August 2025, there have been no official announcements indicating renewed plans to reduce VAT on these energy products.
| Energy Product | VAT Reduction Status | Notes | |---------------------|--------------------------------------|----------------------------------| | Electricity | No VAT reduction planned currently | Focus on grid fee caps/subsidies | | Gas | No VAT reduction planned currently | Prior measures focused on subsidies, not VAT | | Heating Oil | No VAT reduction planned currently | No recent VAT cuts reported | | Petrol (Gasoline) | No current VAT cut; historical temporary fuel tax cuts in 2022 | No ongoing VAT reductions announced |
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