Excise Concession for Large Electricity Consumers Entered into the Law

Last week, the Parliament passed the law, which gives companies with large energy consumption the possibility to acquire electricity at lower excise duty if they fulfil certain requirements. Although during the processing of the draft, the Chamber made a proposal to lower the requirement of the level of electricity intensity of the applicant company from 20 percent to ten percent, the Parliament did not take this into account.

Based on the feedback from companies, only a few industrial companies meet the conditions of electricity intense companies. This is mainly since their electricity intensity level is less than 20 percent and thus according to the law they cannot consume electricity at the concession level.

Due to that, the Chamber proposed the Parliament to decrease the electricity intensity requirement from 20 percent to 10 percent. This proposal is in line with the energy taxation directive that allows a member state to establish the electricity intensity requirement that is even lower than 10 percent. Unfortunately, the Parliament did not take this proposal into account, explaining that the regulation in question is the first electricity excise duty concession aimed at companies with high electrical intensity, due to which it is not possible to assess its impact thoroughly. Furthermore, the state does not want to postpone the passing of the draft since companies are hoping for its quick entry into force. In the Chamber’s opinion, changing of one number would not have prolonged the process.

At the same time the Parliament said that in a few years, the volume of using the discount, impact on the state budget as well as on the competitiveness of companies of the Estonian electricity intense processing industry and information sector will be assessed. Then it will be possible to assess the need for changing the criteria.

Furthermore, the Chamber proposed to exempt entrepreneurs from the obligation to submit sworn auditor’s conclusions on the datum for the calculation of electricity intensity if the annual report has been audited and submitted to the commercial register. The Parliament explained that since the regular annual report does not contain detailed information necessary for tax concessions, such as electricity intensity calculation and cost of electrical energy, this proposal cannot be considered unfortunately.

See the act here.