Tax registration questionnaire and trade registration for a PV direct investment: which authority needs to know what, and by when

Anyone who signs a direct investment soon faces a to-do list that has nothing to do with sun and electricity: register a trade, file the questionnaire for tax registration (Fragebogen zur steuerlichen Erfassung), wait for the tax number. Searching online mostly turns up answers for the system on one's own roof, and since 2023 those usually read: no longer required. That cannot be transferred to a ground-mounted plant of several hundred kilowatts.

Does the relief for small photovoltaic systems also apply to my direct investment?

No. The ministry letter of 12 June 2023 allows operators to skip the notification and the questionnaire only if two conditions are met together: the business is limited to systems exempt from income tax under § 3 no. 72 EStG, and the operator applies the small-business scheme (Kleinunternehmerregelung) for VAT. The exemption covers systems on, at or in buildings of up to 30 kilowatts per residential or commercial unit and no more than 100 kilowatts per taxpayer. A direct investment meets neither condition. A ground-mounted plant is not on a building and lies far above those capacity limits; and anyone who wants the 19% VAT on the purchase price back as input VAT waives the small-business scheme precisely for that reason. The background is explained in VAT on PV and storage direct investments: why 19% is charged here, and how it flows back.

That is not a drawback but the precondition of the model: only a taxable commercial business can use depreciation and the investment deduction. The flip side is that this business has to be properly registered from the start. The letter itself makes clear that the notification duty under § 138 AO in principle applies to every operator, including the operator of a tax-exempt system. The exception for small systems is an administrative tolerance granted to reduce red tape, not an exemption that larger plants could rely on.

Which authorities need to learn about my investment?

Four, and they sit in two different places. You notify two of them yourself, the municipality and the tax office; the chamber learns of it automatically, and the register depends on commissioning.

This article is about the first and the last row. Registration in the core energy market data register depends on the commissioning date and is described in The commissioning date of a solar park: which date fixes the tariff, the deadlines and the depreciation. You do not register with the grid operator or the direct marketer, but they need your tax number: a statement for your electricity deliveries has to show the supplier's tax number or VAT identification number (§ 14(4) no. 2 UStG), and the supplier is you.

What sets a direct investment apart is geography. You live in a city, the plant stands in a rural municipality, often in a different federal state. The Fiscal Code calls every fixed installation that serves the activity of an enterprise a permanent establishment (Betriebstätte, § 12 AO); a solar field is therefore one, even if nobody works there. The municipality, the trade tax multiplier and the chamber district all follow the permanent establishment. The tax office, by contrast, follows the place of management (§ 18(1) no. 2 AO), meaning the place where you take the decisions for your business. ELSTER points this out on the first page of the questionnaire, before the tax office is selected.

Do I need a trade registration, and with which municipality?

As a rule, yes. Anyone who starts the independent operation of a standing trade has to notify the competent authority (§ 14(1) GewO), and operating a photovoltaic system with the intention of making a profit is in principle a commercial activity. The exceptions one often reads about concern other cases. In 2010 the joint federal and state committee on trade law recommended that the size of the system should no longer be decisive, but whether it is installed on a building used by the operator or by a third party; the latter counts as an indication of a trade, and beyond that the overall circumstances and expected income decide. A system that mainly serves the operator's own supply therefore often remains free of the notification duty. A ground-mounted plant on leased land whose electricity is sold in full is the opposite of that case.

Enforcement lies with the federal states and their municipalities, and practice was never entirely uniform; the 2010 recommendation was meant to align it. So do not rely on reports about rooftop systems, but ask the trade office of the municipality where the plant is located. Anyone who fails to make a required notification, or makes it late, commits an administrative offence; the fine can be up to €1,000 (§ 146(2) no. 2 and (3) GewO).

That leaves the question of place. The administrative regulation on trade notifications distinguishes two things: the principal establishment as the centre of business dealings, which can also be in one's own home, and the dependent branch, which includes every fixed local installation that serves the trade. For each branch it requires a separate notification to the authority responsible there. For an investor who lives in one municipality and whose plant stands in another, that can mean two notifications or one, depending on how the offices involved classify a plant without staff. Only the two trade offices can answer that with binding effect.

On the tax side the position is clearer. The Fiscal Code requires the notification to the municipality in which the permanent establishment is opened, and the municipality informs the tax office (§ 138(1) AO). A trade notification fulfils this duty as well. Trade tax later also flows to the municipality of the site; what remains of it after the allowance and the credit against income tax is calculated in Trade tax on PV and storage direct investments: how much of it actually sticks.

What does the questionnaire for tax registration ask?

It asks about the person, the business and the expected figures for the first two years. For a direct investment held as a natural person it is the questionnaire for sole proprietorships. It has to be transmitted electronically via Mein ELSTER (§ 138(1b) sentence 2 AO); the tax office accepts paper only on application in hardship cases. The overview shows which sections exist and what depends on them.

For every individual question, the tax administration's completion guide itself refers to a tax adviser. That is more than a courtesy: several fields are estimates or elections, and their effect only shows months later in a notice.

Which entries in the questionnaire have consequences?

Three: the estimated profit, the VAT information and the start date. The rest is master data.

The estimated profit drives the prepayments

The tax office derives the prepayments from the expected income. It can adjust them to the tax that is likely to arise for the year (§ 37(3) sentence 3 EStG); for trade tax the same applies through the municipality (§ 19(3) GewStG). In a direct investment the result of the new business is usually negative in the first years because of the investment deduction and depreciation. Whether this already shows in lower prepayments on your other income during the year, or only with the tax assessment, depends on the figures available to the tax office. For that your tax adviser needs a sound plan of the business result, not a rule of thumb. How losses from the business are offset against other income is shown in The loss created by an investment deduction (IAB): offsetting it against salary, carrying it back and carrying it forward.

The VAT information decides on 19% of the purchase price

The questionnaire asks whether you use the small-business scheme. Anyone who applies it has no input VAT deduction; with a net investment of €300,000, €57,000 is at stake. The waiver can still be declared until the last day of February of the second following year (§ 19(3) UStG). Anyone who wants the input VAT back early, however, sets the course here. The mechanics and the five-year commitment are described in VAT on PV and storage direct investments: why 19% is charged here, and how it flows back.

The expected tax also determines how often advance returns have to be filed. For newly founded businesses the law provides for monthly filing in the year of foundation and the following year (§ 18(2) sentence 4 UStG). For the taxation periods 2021 to 2026 this is suspended: the expected tax of the current year is decisive, the month above €9,000, otherwise the quarter. As the law is worded today, the suspension ends with the year 2026; whether the legislature will extend it was open at the beginning of October 2026. Anyone signing in 2026 should therefore ask their tax adviser which rhythm applies from January 2027.

In the year of the investment the tax is usually negative because of the input VAT on the purchase price. For that case there is an election: with a surplus of more than €9,000, the entrepreneur can choose the month instead of the quarter (§ 18(2a) UStG). The difference is tangible. With quarterly filing, an invoice from October goes into the advance return due on 10 January; with monthly filing, into the one due on 10 November. A surplus is only paid out once the tax office consents (§ 168 sentence 2 AO); it may request documents such as the purchase contract and the invoice for that purpose. Whether and how the election is exercised in the year of foundation is likewise a matter for the tax adviser.

When does the one-month period start if the plant is still being built?

Earlier than many assume: not only with the first electricity. Notifications under § 138 AO have to be made within one month of the reportable event (para. 4), and the event is the opening of the business. The tax administration already counts preparatory acts as entrepreneurial activity. As examples, its completion guide names renting shop premises and buying goods before the opening, and concludes that the start can lie before the date of the trade registration. Applied to a direct investment, this suggests setting the start no later than the binding purchase contract. Which date is the right one in your case is decided by your tax adviser on the basis of the contract.

The date is more than a formality. The investment deduction requires a business, and where a business is only just coming into being, the administration looks more closely at whether the opening is being pursued seriously; what an auditor wants to see is described in Tax audits and the investment deduction amount: what the tax office actually checks. A prompt and consistent registration fits that picture, a registration a year after the purchase contract does not. An example with assumed dates shows how the deadlines interlock.

Do I become a member of the Chamber of Industry and Commerce, and does that cost anything?

Member yes, contribution in the first years usually no. Anyone who is assessed for trade tax and maintains a permanent establishment in the chamber district belongs to the Chamber of Industry and Commerce (§ 2(1) IHKG). The chamber at the site of the plant is therefore responsible, not the one where you live. Natural persons not entered in the commercial register are exempt from the contribution as long as their trade income does not exceed €5,200 a year (§ 3(3) sentence 3 IHKG). In the years in which the investment deduction and depreciation push trade income below zero, no contribution is due.

The founder exemption that many guides point to often does not fit typical investors. It grants full exemption in the year of opening and the following year, and exemption from the levy in the third and fourth year, in each case up to €25,000 of trade income. But it only applies to people who, in the five financial years before the business opening, had no income from a commercial business, self-employment or agriculture and forestry and held no more than one tenth of a corporation (§ 3(3) sentence 4 IHKG). A salaried manager without shares of their own qualifies; a doctor in private practice or an entrepreneur with their own GmbH does not. For them the general rule applies later: if trade income exceeds €5,200, the basic contribution becomes due, and the levy is based on trade income after deducting an allowance of €15,340. Each chamber sets its own rates.

What happens if a notification is missing or late?

Rarely anything dramatic, but it costs time and liquidity. Three consequences are concrete:

• Trade law: an omitted or late trade notification is an administrative offence that can be fined up to €1,000 (§ 146(3) GewO).
• Tax law: if the tax office requests the questionnaire and it is not submitted, it can enforce submission by a coercive fine (§ 328 AO); a single coercive fine may not exceed €25,000 (§ 329 AO).
• Liquidity: without a tax number there is no advance return and therefore no input VAT refund, and the direct marketer cannot issue proper statements. With €57,000 of input VAT, every lost month is noticeable.

Which documents does my tax adviser need for the registration?

Everything that describes the business and supports the estimates. Hand over these items in one go if possible, so that the one-month period can be met without follow-up questions:

• purchase contract with date, net purchase price and VAT shown separately, plus the agreed payment dates
• site of the plant with municipality, cadastral district and parcel, and the installed capacity
• planned dates for acceptance and commissioning
• revenue and cost plan for the year of opening and the following year
• financing plan with interest and repayment
• details of the direct marketer and the billing route
• whether you had income from a commercial business or self-employment in the past five years, or hold shares in a corporation

Which questions should I ask the provider?

Questions that show whether the handover to your tax adviser has been prepared. A provider does not have to answer your tax questions, and as a rule is not allowed to. But it should supply the facts on which the answers rest.

• Will I receive the details of the permanent establishment (municipality, cadastral district, parcel, capacity) in writing and before signing?
• With which municipality did earlier buyers in this project file their trade notification, and were there follow-up questions?
• Is there an annual plan for the first two years of operation that my tax adviser can use to estimate the income?
• When will the invoice with VAT be issued, and is the acquisition set up as a supply or as a transfer of a going concern?
• Who registers the plant in the core energy market data register, and who is listed there as operator?
• Do you provide tax services yourselves? If so: on what professional-law basis?

The last question is not hair-splitting. A provider that offers to fill in the questionnaire for you or to set your estimates should be able to explain who does that on its side and with what authorisation.

How much ongoing effort results from the registration?

More than with a securities account, and that should be clear before signing. With the registration you run a commercial business: advance VAT returns and an annual return, an annual profit determination, a trade tax return depending on the result, plus mail from the chamber and the municipality. Most of this is handled by the tax adviser on the basis of the project reporting, but it remains your business and your signature. For anyone who does not want that, a direct investment is the wrong form, regardless of the tax effect. What a reporting should deliver to keep this effort small is set out in What happens after closing: reporting, asset management and why a partner is not a broker; employees additionally check whether their employment contract requires a notification, see Saving tax as a high-earning employee: the §7g lever alongside your salary.

How we handle this

We keep the roles separate. Our part is the facts of a project: site, capacity, contract and construction dates, revenue plan, timing of the invoice. The tax treatment of those facts, every entry in the questionnaire and every application to the tax office belong to your tax adviser. We make no recommendation on these points, not even when asked, because we are not allowed to and because it would not do justice to your case. In a no-obligation initial consultation we go through which project data your tax adviser needs for the registration and at what point in the process they are available; the overall process is described in From first enquiry to closing: how a direct investment works step by step. We give no return commitments in the process.