Dáil Éireann Debate, Tuesday - 25 July 2023
327. Deputy Eoin Ó Broin asked the Minister for Finance what evidence is accepted by the Revenue Commissioner to demonstrate electricity generated from renewable sources in order to avail of relief from the electricity tax; and if guarantees of origin are acceptable evidence. [36993/23]
Amharc ar fhreagraIreland’s taxation of fuel and electricity is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel and electricity with which all Member States must comply. The ETD provisions regarding taxation of electricity are transposed into national law in Chapter 1 of Part 2 of Finance Act 2008 (as amended). This provides for the application of an excise duty, in the form of Electricity Tax, on electricity supplied to consumers in the State. Liability rests with the suppliers and returns are filed annually. The current rate of Electricity Tax is €1.00 per megawatt hour which is one of the lowest excise rates on electricity in the EU.
Article 15 of the ETD allows Member States to fully or partially relieve supplies of electricity generated from renewable sources. Ireland has opted to fully exempt electricity of solar, wind, wave, tidal or geothermal/hydraulic origin, along with electricity produced from biomass or from products produced from biomass. The relief from Electricity Tax for electricity generated from renewable sources is set out in section 63 of the Finance Act 2008 (as amended).
I am advised by Revenue that the relief is operated by way of remission in the first instance, with provision for repayment where tax was overpaid in respect of exempted supplies. Electricity Tax is a self-assessed tax and suppliers claiming relief by way of remission on annual returns, or by way of repayment, must sign relevant declarations regarding the factual accuracy of all details provided. As is the norm with self-assessed taxes, remission claimed on returns and claims for repayment are subject to compliance interventions on a risk basis. I am further advised by Revenue that suppliers are required to retain records and documentation to be able to demonstrate that electricity supplies on which relief has been claimed, meets the relevant criteria prescribed in law.
The Electricity Tax Regulations 2008 (S.I. No. 385 of 2008) set out requirements for record keeping in relation to Electricity Tax. Schedule 2 to these regulations deals with specified records. Point 4 of Schedule 2 would encompass the types of records that a supplier would need to maintain in relation to electricity supplied to consumers in the State where it is claimed to have been generated from renewable sources, i.e. records relating to payment of tax and any claim for relief from, or repayment of, tax. These records would be examined in detail by Revenue in the course of any compliance intervention in respect of Electricity Tax. Guarantees of Origin are not specified records for the purposes of Electricity Tax. Full details on Electricity Tax are available on the Revenue website at www.revenue.ie/en/companies-and-charities/excise-and-licences/energy-taxes/electricity-tax/index.aspx.
The Deputy may be aware that regulation of the electricity market in the State, which is the responsibility of the Commission for Regulation of Utilities (CRU), requires electricity suppliers to show the sources of electricity they supply to customers on their bills as well as publishing Fuel Mix Disclosures that show the mix of fuel used for electricity production. Compliance in this area is a matter for CRU. Guarantees of Origin are electronic documents that are used to certify that a quantity of electricity was produced from renewable sources. Guarantees of Origin are issued in the State by the Single Electricity Market Operator (SEMO) and they are tradeable across the EU, as required by EU law. Issuing and trading of Guarantees of Origin are transactions that fall within the electricity market regulatory framework overseen by CRU. It is important to note that the electricity market regulatory framework operates independently of Electricity Tax law. It is also important to note that Guarantees of Origin do not necessarily follow the flow of electricity. To supplement the electricity sourced in the State, Irish suppliers can buy additional Guarantees of Origin to certify that a greater share of their electricity demand is covered by renewable sources. This means that verified “green” electricity supplied in Ireland can be sourced from electricity physically produced in other EU countries. It also means that the fuel mix reported by Irish electricity suppliers can have a higher percentage share of renewable energy sources than exists in the actual physical generation distributed to end customers via the grid in Ireland.
