Excise duty refunds for industrial production and oil refining
You do not need to pay excise duty or the strategic stockpile fee if the fuel is used
- as a raw material or an auxiliary substance in industrial production
- in direct first use in industrial manufacture of goods
- as an energy source in the oil-refining process.
If the price of the fuel purchased for the above purposes includes excise duty, the fuel user can submit a refund application on the excise duty and the strategic stockpile fee to the Tax Administration.
Refunds can be claimed for light fuel oil, heavy fuel oil, LPG and their replacement products, and for natural gas You can also claim a refund for coal, unless the coal has been used in oil refining.
You can also use a paper form. You can file on paper if electronic filing is not possible, for example due to technical difficulties.
What is industrial production?
Industrial production refers to operations under section C (manufacturing) or section B (mining and quarrying) of the Standard Industrial Classification of Statistics Finland. An excise duty refund for industrial production is also available in the case of professional greenhouse cultivation.
Purpose of use of fuel
Fuel exempt from excise duty can be used for industrial operations only in the following cases:
- As a raw material: the fuel or its component is contained in the end product.
- As an auxiliary substance: the fuel is used directly in the manufacture of the product or the product cannot be manufactured without the fuel.
- In direct first use in the manufacture of goods: the flame or combustion gas produced by the fuel is in contact with the product manufactured at some point of the manufacture.
Tax exemption depends on the fuel’s first use
From the point of view of tax exemption, the first use of the fuel is decisive. If the fuel’s first use in industrial production qualifies for tax exemption, the fuel does not turn taxable when heat produced in the process is recovered after the process and used for other purposes. Likewise, if the fuel is first used in heat production and is therefore subject to excise duty, and then at a later stage combustion gas is recovered and used in another process to manufacture a product, the first, taxable use – i.e. heat production – does not turn tax-exempt.
Read more in the detailed guidance on Tax exempt use of fuels in industry (available in Finnish and Swedish, link to Finnish)
When can you request a refund?
You can request a refund for the excise duty on fuels either for the whole year in one go or separately for January–June and July–December. Request a refund for the fuels you have used for tax-exempt purposes during the period. You can request the refund after the application period has ended.
The application must be submitted to the Tax Administration within three years of the end of the application period. The time limit for requesting a refund is counted from the start of the calendar year following the application period. Specify the fuels used per production plant.
How much of the excise duty can be refunded?
The refund depends on the fuel type and its composition, volume and date of purchase. The part of excise duty that was included in the price of the fuel can be refunded. Even if the exact composition of the fuel is not known, the basis of the refund is the refund levels determined by the Tax Administration. Their calculation is based on the average of fuels released for consumption. The refund levels are confirmed every six months: the level for January–June is confirmed in October, and the level for July–December, in March.
The refund for fuel is determined on the basis of the date of purchase.
MyTax calculates the refund automatically based on either the exact composition of the fuel or the refund level. If you file on a paper form, you can calculate the refund yourself.
The minimum refund is €330; smaller amounts are not refunded.