What is corporate energy taxation?

Energy taxation: purpose and impact

Energy taxation is an environmental fiscal measure introduced amidst an ecological crisis. Human activities increasingly strain environmental resources, particularly through energy production. This taxation aims to facilitate the energy transition for both individuals and businesses by altering consumption behaviors.

Practically, it involves taxes, fees, or duties paid to the tax authorities, increasing the cost of polluting goods and services to offset their negative environmental impacts. Consequently, it enhances the competitiveness of eco-friendly products and services, promoting corporate social and environmental responsibility (CSR). Companies are encouraged to adopt sustainable practices and invest in clean technologies. For instance, businesses may reduce fossil fuel use in favor of renewable energy, positively impacting greenhouse gas emission reductions. Additionally, this taxation supports funding for environmental initiatives and green infrastructure projects, bolstering global efforts to combat climate change and preserve natural resources for future generations.

Energy taxes in France

Many ecological taxes, also known as green taxes, are levied on polluting energies. Cabinet Sion Avocat deciphers them for you below.

Electricity taxes

Here are the various taxes on electricity:

• TICFE, "taxe intérieure sur la consommation finale d’électricité" in French, domestic tax on final electricity consumption. Also known as CSPE, "contribution au service public de l'électricité" in French (contribution to the public electricity service), this tax applies to both electricity suppliers and individuals or legal entities producing electricity for their own consumption.
• Departmental tax on final electricity consumption: same principle, but the rate is set by each department, independently of the TICFE.
• Local tax on final electricity consumption: same principle, but to fund local budgets
• CTA, or "contribution tarifaire d'acheminement" in French (transmission tariff contribution)
• And, of course, the well-known VAT (value-added tax).

Taxes on energy consumption

These taxes apply to "polluting products" and are listed below:

• TICPE, "taxe intérieure de consommation sur les produits énergétiques" in French or domestic consumption tax on energy products. It replaces the TIPP, or domestic consumption tax on petroleum products, and concerns companies involved in the production, import and/or storage of fossil fuels used as motor fuel or heating fuel (coal, natural gas, fuel oil, diesel, gasoline). The rate depends on use, type of consumer (private or business) and place of consumption.

• TICC, "taxe intérieure de consommation sur le charbon" in French or domestic consumption tax on coal, which applies to companies delivering coal, lignite, coals, etc., as well as to individuals who produce (or import) their own coal.

• TICGN, "taxe intérieure de consommation sur le gaz naturel" in French or domestic consumption tax on natural gas, collected by suppliers from individuals and companies using natural gas as a fuel.

All these domestic consumption taxes (or TICs for short, for "taxes intérieures de consommation" in French) also include a CCE, i.e. a "contribution climat énergie", a kind of carbon tax to make carbon energies more expensive, and to limit GHG (greenhouse gas) emissions.

Tax optimization of energy taxes

As in all sectors, the support of an expert tax lawyer, such as Maître Sion, is essential for effective and legal energy tax optimization. It is possible to receive full or partial refunds of various environmental taxes through exemptions or reduced rates, significantly alleviating the financial burden on businesses.

For instance, companies in the road sector can obtain a refund of the TICPE, a significant tax for this sector. Companies with high energy consumption can consider a TICGN refund, offering substantial financial relief. Similarly, industrial companies can receive refunds on electricity taxes, resulting in significant savings on their energy expenses.

It is crucial to note that these refunds and exemptions are not automatic. There are declaration formalities to be completed with the customs administration and your energy supplier. These procedures can seem complex and tedious, but with the assistance of an experienced tax law firm, they can be efficiently managed. Legal support helps navigate administrative and regulatory nuances, ensuring all optimization opportunities are fully exploited within the legal framework.

Therefore, for any company seeking to optimize its energy-related tax burdens, consulting a specialized law firm is not only recommended but often indispensable for maximizing tax benefits and minimizing costs.

 

So, if you're looking for a tax lawyer who's an expert in corporate eco-taxation, don't hesitate to contact Cabinet Sion Avocat, who can help you with all the administrative formalities involved in energy tax optimization, while respecting the law!

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