In this very specific case a claim was made by the Finnish Tax Recipients’ Legal Services Unit whereby a company engaged in wind farming industry had in fact committed to produce electricity against a compensation in the form of the State contributed Feed-in Tariff. Therefore, the Feed-in Tariff was seen as a counterpart to the sale of such service (to the Finnish Energy Authority) and requested to be added to the VAT base of the sales by the company.

It was more precisely insisted that the Feed-in Tariff received by the company was rather be considered a subsidy directly linked to the price of the electricity sold by the company. The subsidy should thereby, according to the claim, be treated as a consideration to be added to the VAT base of the sales by the company.

The claim was dismissed and the final decision had definitive impact widely in the renewable energy sector and made an important precedent in outlining the scope of the VAT Act and the VAT Directive. As a note, the case was rather aggressively pleaded by the specific Tax Recipients’ Legal Services Unit, where even guidance by the French Tax Administration was referred to, and which we had to counterargue as well as bring in our argumentation referring to related VAT practices in various EU jurisdictions.