(2023) Photovoltaic systems: Tax reduction according to § 35a EStG possible!

Since 1 January 2022, photovoltaic systems on single-family homes (including roofs of garages, carports, and other outbuildings) up to 30 kWp are legally tax-free. For systems on multi-family homes and mixed-use buildings, a limit of 15 kWp per residential or commercial unit applies. Photovoltaic systems on predominantly commercially used buildings up to 15 kWp per unit are also eligible.

Tax exemptions have limitations: Expenses related to tax-free income cannot be deducted as business expenses or income-related expenses, according to § 3c para. 1 EStG. This also applies to costs related to the operation of photovoltaic systems, even if they are tax-free.

Photovoltaic systems: Tax reduction under § 35a EStG possible

A deduction under § 35a EStG is possible if it concerns photovoltaic systems in connection with the home. This is based on a simplification rule from the tax authorities (BMF letter dated 17.7.2023, IV C 6 - S 2121/23/10001 :001).

In principle, costs related to photovoltaic systems can be business expenses, but they are not considered. A deduction under § 35a EStG would normally not be applicable. However, the BMF allows the tax reduction in the mentioned letter if the general conditions are met.

It is important that proper invoices are available and amounts are paid cashlessly. Wages in craftsmen's invoices, machine and travel costs are eligible. The work must be carried out on buildings used for own residential purposes.