SOLID FUEL CARBON TAX

Summary

SOLID FUEL CARBON TAX APPLIES :

  • to ‘first supply’ of all coals, smokeless and peat briquettes
  • to ‘first supply’ from either; one supplier to another; or from one supplier to a consumer
  • All ‘first suppliers’ must register with the Revenue Commissioners for SFCT.
  • All first suppliers must make a return for a two month period to the Revenue Commissioners by the end of the following month – i.e. for May/June the Carbon tax must be returned and paid for by 31st July  to Revenue Commisioners.
  • SFCT from May 1st 2014
Product Carbon Tax per bag / bale
Coal and smokeless 40 kg € 2.40
Peat briquettes 12.5 kg € 0.52

 

Introduction:

In 2010, a carbon tax was introduced in Ireland. Initially the solid fuel carbon tax or SFCT applied to kerosene, marked gas oil, liquid petroleum gas, fuel oil and natural gas. In Budget 2013 it was decided to extend carbon tax to solid fuel, on a phased basis. From May 1st 2013, carbon tax was applied to all solid fuels supplied in Ireland at a reduced rate of € 10 per tonne of CO2 and at a rate of € 20 per tonne of CO2 from May 1st 2014. The formula used to calculate the tax is:

        NCV x EF x A = SFCT

where NCV is Net Calorific Value of the fuel, EF is the Carbon Emission factor, and A is the amount charged per tonne of CO2 emitted (which is € 10 from May 1 2013, and € 20 from May 1 2014).

The legislation already has a table to show the SFCT for each product:

Solid fuel type

Rate of Tax plus Vat per tonne

from May 1st 2013

Rate of Tax plus Vat per tonne

from May 1st 2014

Coal € 26.33 52.67
Peat:
Peat briquettes € 18.33 € 36.67
Milled peat € 8.99 € 17.99
Other peat € 13.62 € 27.25

From May 1st 2014 the SFCT has meant an increase of:

  • € 2.40 per 40kg bag for coal and smokeless, and
  • 52 cent per 12.5kg bale of briquettes.

What solid fuel is taxable?

Basically, coal and peat are the taxable fuels. Coal in this case is defined in the Finance Act 2010 as including ‘ coal and lignite, solid fuel manufactured from coal and lignite, and any other energy product within the meaning of Article 2.1 of the Directive in solid form”. (This Article 2.1 is from a European Directive 2003/96/EC of 27th October 2003). Amongst the coal products listed in the Directive are:

  • Coal; briquettes, ovoids and similar solid fuels made from coal
  • Lignite
  • Coke and semi-coke of coal, of lignite or of peat.

Peat includes peat briquettes, milled peat (made from granulated peat for use as a fuel), and any other peat products that can be used as a fuel.

So all coal products, such as Polish, all ovoids, all smokeless products and all peat products, such as peat briquettes which are sold in Ireland, are liable for SFCT at the time when they are first sold by a supplier.

Manufactured products such as ovoids made from coal are liable at the tax rate applicable to coal, and if made from both peat and coal, then also the rate for coal applies. Similarly for products made from peat, the rate for peat applies.

Importantly, there are a number of other issues:

  • Where first supply is to a person outside the state, that supply is not liable to SFCT
  • Where solid fuels are first supplied for use as a raw material for manufacturing a solid fuel product in the State, then SFCT is not chargeable. however a declaration must be made to Revenue to qualify for the exemption. SFCT only applies to finished products in this case.
  • In relation to peat,
    • where peat is extracted for supply, then SFCT applies,
    • where peat is extracted for your own use, then SFCT does not apply.
  • SFCT does not apply to wood.

Who is liable and when?

Liability  occurs when a quantity of solid fuel is first supplied by a supplier within the State and it is the supplier that is liable for the carbon tax, and must pay Revenue. A few clarifications in relation to this then

  • ‘First supply’ refers to supply of a quanity of fuel, which has not previously been supplied in the State.
  • Supply must take place within the State and to ‘supply’ means a supply from one supplier to another supplier where both are established in the State, i.e. from importer to coal merchant or from a supplier to a consumer, i.e. from a coal importer to a householder.
  • A ‘supplier’ may be either registered for VAT in the State or be a taxable person.
  • Any supplier who makes a first supply of solid fuel in the State must register with the Revenue Commissioners for solid fuel carbon tax purposes.

The Revenue Commisioners form to register for Solid Fuel Carbon Tax pdf-icon

Forms should be returned to Office of the Collector General, Revenue Commissioners, Government Offices, Mill Lane, Listowel, Co Kerry.

  • No matter how small the quantity, the first supplier must charge the tax and make a return.
  • Returns of the tax must by made to Revenue every two months, for example for supplies made in May and June 2013 must be returned and paid to Revenue by end July 2013. Initally paper returns will be made, but in time returns can be made electronically. Paper return form pdf-icon
  • Tax is collected on a self-assessed basis, so the person liable assesses the liability, makes the return and pays the Revenue Commissioners.

RELEVANT DOCUMENTS

LEGISLATION:

Finance Act 2010 – Chapter 3

Finance Act 2013 – Section 61.

 

FORMS:

pdf-iconRegistration form for solid fuel suppliers.
Or you can use this link to the Revenue website for the registration form

pdf-iconReturn form for solid fuel suppliers . Or you could use this link for the return form.

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