By: Lukáš Pflug, Tereza Horáková
March 24, 20264 min read
The General Directorate of Customs has published a revised interpretation of the Act on Excise Duties, which governs the exemption of gas used in the combined heat and power (CHP) production in cogeneration units. This new position represents a significant shift from previous practice, where essentially all gas consumed in cogeneration was exempt, provided that at least part of the heat was supplied to households.
The new approach was inspired by a court ruling that primarily addressed the interpretation of the condition under which heat from cogeneration must be "supplied to households" to qualify for the gas tax exemption. In its information note derived from this judgment, the General Directorate of Customs confirmed that the exemption for gas used to produce heat for households applies in all cases, regardless of the number of households.
However, if gas is used for CHP production where heat is supplied to both households and other entities, the gas consumption must be apportioned. The exemption applies only to the portion of gas used in cogeneration for heat actually delivered to households. It does not matter whether one or more households are involved; the sole decisive factor is the volume of heat supplied to them. The portion of gas used to produce heat supplied to consumers other than households no longer meets the exemption criteria and will now be subject to tax.
For operators of cogeneration units, this creates an obligation to begin allocating gas consumption according to individual heat flows or to use qualified estimates where precise data is unavailable.
Key points for implementation:
The new interpretation applies from March 1, 2026.
It has no retroactive effect on previous tax periods.
Affected entities are required to adjust their calculations for exempt gas quantities according to the new methodology only from the aforementioned date.
The authors of this article or your GT team would be happy to help you assess whether these changes affect your operations or assist you in implementing the new methodology.
This text was translated by AI
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