1. 9. 2014 | Source: BusinessInfo.cz
In accordance with the conditions governing the Czech Republic’s membership of the European Union, as of 1 January 2008 the Czech Republic became obliged to introduce a tax on electricity, natural gas and solid fuels. The following article presents information about these environmental taxes. It explains who is liable for these taxes, the conditions governing exemption from these taxes, and what legislation relates to environmental taxes.
This obligation was incorporated into Act No. 261/2007 Coll., on the Stabilisation of Public Budgets, resulting in the complete transposition of Council Directive 2003/96/EC, restructuring the Community framework for the taxation of energy products and electricity. A small change was established by the revision of this particular Act that became active law 1st October 2013 (169/2013 Coll.)
- Subject of taxation
- Tax on natural gas and certain other gases
- Tax on solid fuels
- Tax on electricity
- Tax administrator
- Taxation period and registration
- Further information, forms and legislation
- Form “Environmental Tax Return”
Subject of taxation
The subject of taxation varies according to the type of energy product. The following are subject to taxation:
- natural gas and certain other gases listed under the nomenclature codes (NC) 2711 11, 2711 21, 2711 29 a 2705
- solid fuels - black coal NC 2701, brown coal NC 2702, coke NC 2704 and other hydrocarbons listed under NC 2706, 2708, 2713 to 2715
- electricity listed under NC 2716
Tax on natural gas and certain other gases
The following are liable for tax on natural gas:
- suppliers that supply gas to an end consumer within the tax territory,
- operators of distribution systems, operators of transmission systems and operators of underground gas storage facilities,
- natural persons or legal entities that use gas taxed at a reduced rate for a purpose for which a higher tax rate is levied,
- natural persons or legal entities that use tax-exempt gas for purposes other than that to which the tax exemption relates,
- natural persons or legal entities that consume untaxed gas, with the exception of tax-exempt gas.
Gas used for the following purposes, for example, is exempt from tax:
- for generating heat in households
- for generating electricity
- as fuel for sailing craft
- in metallurgical processes and mineralogical processes
The tax rates are specified in § 6 of Act No. 261/2007 Coll. and vary according to the type of gas. The tax base is the quantity of gas in MWh of combustion heat; if combustion heat cannot be expressed in MWh, the combustion heat is determined at the rate of 15 MWh per ton of gas.
Tax on solid fuels
The following are liable for tax on solid fuels:
- suppliers that supply solid fuels to an end consumer within the tax territory,
- natural persons or legal entities that use tax-exempt solid fuels for purposes other than that to which the tax exemption relates,
- natural persons or legal entities that consume untaxed solid fuels, with the exception of tax-exempt solid fuels.
Fuels used for the following purposes, for example, are exempt from tax:
- for generating electricity
- for producing coke
- as fuel for sailing craft on waters within the tax territory
- in chemical metallurgical and mineralogical processes
- for technological purposes in the business which manufactured the solid fuels
The tax rate is 8.50 CZK/GJ of combustion heat in the original sample. The tax base is the quantity of solid fuels expressed in GJ of combustion heat in the original sample.
Tax on electricity
The following are liable for tax on electricity:
- suppliers that supply electricity to an end consumer within the tax territory,
- operators of distribution systems and operators of transmission systems,
- natural persons or legal entities that use tax-exempt electricity for purposes other than that to which the tax exemption relates,
- natural persons or legal entities that consume untaxed electricity, with the exception of tax-exempt electricity.
The following types of electricity, for example, are exempt from tax:
- environmentally-friendly electricity;
- electricity generated by means of transport (if also consumed there);
- generated by taxed products, if such products are subject to tax on natural gas, tax on solid fuels or excise tax
The tax rate is 28.30 CZK/MWh. The base for tax on electricity is the quantity of electricity in MWh.
Tax is administered by the customs authorities, which also issue two types of permit. One of these is a permit for the acquisition of tax-exempt energy products and may be obtained through a decision issued by the customs authority after reviewing the permit application. The same applies to the tax-free acquisition of energy products. A natural person or legal entity that does not possess this permit may not be supplied with tax-free energy products or tax-exempt energy products.
The local jurisdiction of the various customs authorities is established by Act No. 17/2012 Coll., on the Customs Administration Office of the Czech Republic, as amended.
Taxation period and registration
The taxation period is the calendar month. Taxpayers are obliged to file a proposal to be registered for tax with the customs authority no later than on the day on which they become obliged to declare tax and file a tax return. Taxpayers are obliged to file their tax return and pay tax within 25 days of the end of the taxation period in which this obligation first began to apply.
Further information, legislation
Environmental taxes are primarily governed by Act No. 261/2007 Coll., on the Stabilisation of Public Budgets, by revised Act n. 169/2013 Coll, as well as by Act No. 17/2012 Coll., on the Customs Administration Office of the Czech Republic.