Excise duty refunds to energy-intensive companies
Companies with industrial operations can request a refund of energy taxes they have paid. A condition for refunding is that the excise duty amount is sufficiently big in comparison with the company’s added value. To take an example, the company qualifies for a refund of excise duties for 2020 if its excise duties during the accounting period equal more than 0.5% of the company’s added value. The excise duties include both the duties paid by the company and the duties included in the prices of the products purchased by the company. Added value refers to the combined total of the profit/loss for the period, depreciation, reductions in value and staff expenses according to the company's approved financial statements for the accounting period.
Excise duty can be refunded on category II electricity used in industry, coal, natural gas, fuel peat, tall oil, and on LPG, light and heavy fuel oil and biofuel oil that has been not been used as motor fuel. Tax refunds to energy-intensive companies only concern excise duties. In other words, the refund application may not contain strategic stockpile fees.
For the accounting period 2020, the refund is 85% of the portion of excise duties that exceeds 0.5% of the company’s added value. However, only the part of the thus calculated tax refund that exceeds €50,000 is repaid.
When assessing the amount of excise duties paid, the company can include the excise duties contained in the district heat and process steam it has bought.
Energy-intensive companies must request excise duty refunds from the Tax Administration. You can request a refund only after the company’s accounting period has ended. Submit the application within 6 months from the end of the accounting period.
Separate refund requests cannot be filed on the company’s different lines of business or different establishments: the company can submit only one refund request covering all its operations.
Read more: Tax refund to energy-intensive company (available in Finnish and Swedish, link to Finnish)
You can also use a paper form. You can file on paper if electronic filing is not possible, for example due to technical difficulties.
Tax efunded to an energy-intensive company is State aid – the details are recorded in the State aid register of excise taxation
A tax refund to an energy-intensive company is State aid. The Tax Administration enters the aid recipient, i.e. the party requesting a refund, in the State aid register of excise taxation. You can check your company’s aid details in MyTax. Some State aid details are public information.
Please note that State aid may only be granted to companies that are not in financial difficulties under the General Block Exemption Regulation. If the company is in financial difficulties, no aid is granted and any aid already granted may be claimed back.
Read more: State aid under the General Block Exemption Regulation in excise taxation (available in Finnish and Swedish, link to Finnish)
Tax refunding will change
The conditions for tax refunds to energy-intensive companies will tighten up in the future, and excise duties paid in 2025 are no longer refundable to energy-intensive companies. Further, excise duty on electricity is no longer included in the excise duties on the basis of which refunds for 2021 are calculated.
Excise duties qualify for refunds if the company’s excise duties
- for 2020 are over 0.5% of the company’s added value – refund 85% of the excise duties exceeding this limit
- for 2021 are over 1.0% of the company’s added value – refund 85% of the excise duties exceeding this limit
- for 2022 are over 1.7% of the company’s added value – refund 85% of the excise duties exceeding this limit
- for 2023 are over 3.7% of the company’s added value – refund 85% of the excise duties exceeding this limit
- for 2024 are over 3.7% of the company’s added value – refund 45% of the excise duties exceeding this limit.
If the company’s accounting period is split between two calendar years, the excise duty refund is calculated in two parts.
Example 1: The company’s accounting period is 1 January 2020–31 December 2020, and its added value is €8,000,000. The company has paid €1,200,000 in energy tax in 2020.
The refund is calculated based on the figures for 2020: (€1,200,000 – €8,000,000 x 0.5%) x 85% – €50,000 = €936,000. The total amount refunded to the company is thus €936,000.
Example 2: The company’s accounting period is 1 April 2020–31 March 2021, and its added value is €8,000,000. The company has paid €900,000 in energy tax in 2020 and €300,000 in 2021.
The refund is calculated in two parts: (€900,000 – 9 months / 12 months x €8,000,000 x 0.5%) x 85% + (€300,000 – 3 months / 12 months x €8,000,000 x 1%) x 85% – €50,000 = (€870,000 x 85% + €280,000 x 85%) – €50,000 = €927,500. The company is thus refunded €870,000 for 2020 and €280,000 for 2021, i.e. the total amount of refund is €870,000.