Fuel Levies

Electricity Tax

The Finance Act 2008 provided for an excise duty called electricity tax.  It applies to supplies of electricity after 1st October 2008.  The supplier pays the tax and makes all relevant returns.

The tax is also applicable to a supplier which is situated outside the State.  It must make the relevant arrangements with the Revenue for payment and accounting.

There are two different tax rates. The rate applicable to business use is 50 cents per megawatt hour. The rate is €1 cent per megawatt hour for non-business, non-domestic use. Supplies for domestic use are not subject to the tax.

Registation & Returns

Suppliers must register with the Revenue Large Cases division.  The accounting period is annual.  Prescribed forms of returns are required, giving particulars of

• unit supplied,
• units for taxable use
• units for business and non-business use,
• details of electricity received from renewable and green sources,
•  tax payable

Where all the requisite information is not shared available, an estimated return may be made. The supplier must assess at what rate the tax is payable that based on exempt household use and the relevant taxable business use.

The return is made, and the tax is payable by electronic funds transferred.  Where a revision of a return is made, there may be an underpayment or overpayment requiring adjustment.

Records must be kept for five to six years and open for inspection. Contravention of the key aspects of the legislation constitutes an offence.

Reliefs

There are reliefs from tax in respect of the following energy

• generated from renewable sources,
• environmentally friendly heat and power generation, code generation
• certain chemical reduction electrolytic or metallurgical processes
• combined heat and power generation

The heat and power co-generation is conditional on approval by the relevant authority that it satisfies EU high-efficiency criteria.

 

Solid Fuel Carbon Tax

Solid fuel carbon tax applies to solid fuels supplied in the state after 1st May 2013.  It applies to coal and peat as defined. The tax applies to peat extracted for  supply in the state. Supplies of fuel for use outside the state are not subject to the tax.

Liability to the tax arises on the first supply of solid fuel by a supplier.  The supplier is accountable for the tax and must make payment.

The first supply applies to the first supply in the State.  There is a first supply when there hasn’t been a previous supply in the state.  Therefore a supply by one supplier in the State to another and supply to a consumer in the state each constitute a supply.  Self-supplies are also taxed.

A person who is VAT registered or a taxable person in the State who makes a first supply in the State is an accountable person and must register with the Revenue.

The tax does not apply to imports personally brought in by an individual for his own private use.  He or she must accompany the fuel on entering the state.  If the person having so brought it in and supplies it to another person, he becomes accountable for the tax.

The tax is self-assessed.  Accountable persons must assess liability and make a return of payment.

Where a fuel is first supplied for use as a raw material in the manufacture of a solid fuel product, tax is not charged and not applied.  The supplier makes a return to qualify for the exemption.  The tax then becomes payable when the manufactured product is supplied.  The rate applicable is the finished product rate.

Application & Relief

The tax is based on tonnage. The rate varies between 2633 per ton of coal, 1833 for peat briquettes and lower rates for milled peat and other peats.

There are relief available if it is  proved that they apply.  There is relief from tax for solid fuels supplied for use in the generation of electricity and for no other purpose.

There is relief for peats delivered for use in an installation covered by a greenhouse gas emissions permit (GHG) issued by the EPA.

There is a relief for coal for use in installations with a GHG permit.

Provided clearance is obtained in advance by declaration, the relief may be applied at source.

There is relief from the tax by repayment to the user when the fuel is used for certain environmentally friendly and electric generating process.  Tax relief by repayment to the consumer is provided for peat used in an environmentally friendly heat and power co-generation.  This is on condition that the unit is approved by the Commission for Energy Regulation as meeting high-efficiency criteria required under EU legislation.

Accounting for Tax

The accounting period is bimonthly.  The return is made at the end of the following month.

Every supplier who makes its first supply of solid fuel after 1 May 2013 must register with Revenue.  Returns were initially in paper form and ultimately in electronic form.  Records must be kept and maintained for six years.

Natural Gas Carbon Tax

Natural gas carbon tax applies to the supply of natural gas to consumers in the State.  It is applied under the Finance Act 2010 and the regulations thereunder.

Tax is payable at  a rate specified per megawatt hour. It is varied from time to time.  It is based up to the quantity CO2 emitted, measure on net calorific value.

There is relief where it is shown to Revenue that the use is solely for the generation of electricity, chemical reduction electrolytic or metallurgical processes.

A part relief applies to natural gas use by an installation covered by greenhouse gas emission permits issued by the EPA.  It is taxable at a lower rate.

A part relief is available for natural gas supplied for use in environmentally friendly heat and power co-generation.  Suppliers must register with the Revenue prior to supplying natural gas.

Suppliers established outside the State must make arrangements with Revenue to account for the tax. The tax must be accounted for and paid every two months.  Returns are required in a statutory form.  Records must be kept for six years.

Contraventions or offences are subject to prosecution and/or other mechanisms are enforcement of excise law.  The fraudulent evasion of tax is subject to prosecution on indictment.

Carbon Tax

A carbon tax was introduced in 2010 in Ireland.  It applies to kerosene, marked gas oil, liquefied petroleum gas, fuel oil and natural gas.  It applies at the rate of €20  per ton of carbon dioxide emitted by fossil fuel.

The carbon tax is introduced in the 2010 budget.  The carbon is itself subject to VAT.

The Finance Act 2020 provided for annual increases in carbon tax of €7.50 per tonne up to 2030.

Budget 2021 included an increase of €7.50 from €26 per tonne to €33.50 per tonne. The increase applied to auto fuels from October 2020 and to solid fuels from May 2021.

A further increase of €7.50, from €33.50 to €41.00 per tonne of carbon dioxide emitted, was announced in Budget 2022. The increase applies from 13 October 2021 for auto fuels and 1 May 2022 for all other fuels.

Solid Fuel Carbon Tax

The solid fuel carbon tax is amended.  There is a relief for solid fuel with biomass content of 30% or more where it has been identified/marked in accordance with regulations and shown to the satisfaction of the revenue commissioners to have been supplied as such.

There is a relief of 30% of the tax chargeable where the biomass content is less than 50% or 50% where the biomass content is more than 50%. The supplier deducts the amount of the relief on accounting for tax.

Carbon Tax on Mineral Oil

Finance Act 2010 provides for a carbon charge on mineral oil.  There is a relief for mineral oil that is used by installations covered by greenhouse gas emission permits.

There is relief for oil that is used in installation covered by gas, greenhouse gas emission permit.  The exemption may be applied for.  The bona fides of the exemption claim must be shown.

The rates of mineral oil tax vary with reference to the non-carbon and carbon elements.  There is an additional element for the carbon charge element of the tax. The supplemental mineral oil tax with respect to the carbon charge element applies at varying rates to light oil, including petrol and aviation gasoline.

Heavy oil, including that used for navigation propellants, liquefied petroleum gas,

Carbon Tax on Fossil Fuel

The carbon tax is a charge to tax on fossil fuels.  It was implemented at first in the Finance Act 2010 by way of a mineral oil tax carbon charge.  This is included in the mineral oil tax.  It has been supplemented by natural gas carbon charge and coal and solid fuel carbon charge.

Reliefs available from the charge in respect to certain environmentally friendly  supplies  There is relief from the charge for supply of biofuel and also the biofuel element of blended mineral oil.

Finance Act 2012

Finance Act 2012 removes the requirement for an electricity supplier who is not established in the State to establish a company in the State to undertake the Electricity Tax responsibilities of that supplier, including liability for and payment of the tax. The supplier must instead make arrangements with Revenue for payment of the tax and accounting for it, and appoint a competent person in the State to see to those arrangements.

Finance Act 2012 provides for changes to the law for Natural Gas Carbon Tax.

The rate of that tax is increased, with effect from 1st May 2012, from €3.07 to €4.10 per megawatt hour, as announced by the Minister on Budget day.

Provision is also made that where a consumer of natural gas provides false or misleading information to a supplier, it is that  consumer (and not the supplier) who is liable for any resulting undercharging of tax.

The section also removes the requirement for a natural gas supplier who is not established in the State to establish a company in the State to undertake the Natural Gas Carbon Tax

responsibilities of that supplier, including liability for and payment of, the tax. The supplier must instead make arrangements with Revenue for payment of the tax and accounting for it, and appoint a competent person in the State to see to those arrangements.

A relief is introduced for natural gas supplied for environmentally friendly heat and electricity cogeneration with output capacity of equal to or greater than 50kWe. The relief is a partial one, subject to payment of tax at the minimum rate set down in EU excise law i.e. currently €0.54 per megawatt hour.

Finance Act 2012 amended the law for Solid Fuel Carbon Tax, to provide that, where a consumer of solid fuel provides false or misleading information to a supplier, it is that consumer (and not the supplier) who is liable for any resulting undercharging of tax.

Provision is also made for a relief for solid fuel used for environmentally friendly heat and power cogeneration with output capacity of equal to or greater than 50kWe. In the case of coal, the relief is a partial one, subject to payment of tax at the minimum rate set down in EU excise law i.e. currently €4.18 per tonne. For peat, full relief is provided for.

Finance Act 2014

The Finance Act 2014 provides that Revenue Commissioners may defer a payment of mineral oil tax to the 15th day of the following month.  This is subject to a ministerial order to commence the section.

The 2014 Act provides that mineral oil tax, including a carbon tax, applies to natural gas and biogas and uses of vehicle fuel.  It provides for the supply and movement of gas as a transport fuel.  Producers and importers of vehicle gas must register with the Revenue.

There is provision for a carbon tax relief for the biogas elements of natural gas used in vehicles.  Rates for vehicle gas are provided for.  This is to be commenced by commencement notice by the Minister.

Finance Act 2016

Finance Act 2016, amended the mineral oil taxation provisions to apply mineral oil tax to natural gas and biogas used as vehicle fuel. It provides for the liable persons, rate of charge, returns and payments. There is a relief from the carbon charge component for vehicle gas that contains biogas. The provision is subject to commencement order. Vehicle gas was not an excisable product under Finance act 2001.

The sale and supply of natural gas is not reliable to both mineral oil tax for natural gas carbon tax.

Finance Act 2016 extended relief from the carbon tax for natural gas used in highly efficient heat and power co-generation to full relief from partial relief. The relief is limited to natural gas actually used to generate high efficient still electricity as certified by the competent body.  This is subject to a commencement order.

Finance Act 2016 extended the relief from carbon tax for coal used in high efficiency heat and power co-generation to full relief from partial relief. The relief is confined to solid fuel actually used to generate high efficiency electricity as certified by the competent body.

Finance Act 2016 amends ensure that relief from carbon charge for mineral oil tax used in high-efficiency heat and power co-generation is confined to mineral oil actually used to generate highly efficient electricity as certified by the competent authority.

Finance Act 2019-20

Finance Act 2019 provides for the equalisation of the rates of Electricity Tax for business and non-business use from 1 January 2020. The rate for business use will change from €0.50 to €1.00 per megawatt hour.

Finance Act 2020  provides for annual increases to the rate of natural gas carbon tax commencing in 2021 and concluding in 2030. The increased rates come into effect on the first day of May each year and are based on charging an additional €7.50 per tonne of carbon dioxide up to and including 2029 and an additional €6.50 per tonne in 2030. Section 67 of the Finance Act 2010 is amended to include a table specifying yearly rates of natural gas carbon tax. Section 67 is further amended to support the operation of the ten-year trajectory of rate increases.

 Finance Act 2020 provides for annual increases to the rates of solid fuel carbon tax commencing in 2021 and concluding in 2030. The increased rates come into effect on the first day of May each year and are based on charging an additional €7.50 per tonne of carbon dioxide up to and including 2029 and an additional €6.50 per tonne in 2030.

Schedule 1 to Finance Act 2010 is amended to specify yearly rates for each description of solid fuel. Section 78 is amended to support the operation of the ten-year trajectory of rate increases.

Finance Act 2020 amends the Finance Act 2001 to transpose Article 12(1)(ba) and (c) of the EU General Excise Directive (2008/118/EC), as amended by Article 2 of EU Directive 2019/2235. The section confirms the exemptions applied to excisable products delivered to NATO forces and, with effect from 1 July 2022, delivered to forces of Member States undertaking a common defence effort under the Common Security and Defence Policy (CSDP).