No VAT exemption possible on German gas levy, but EU wants to find a solution

FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels

BRUSSELS (Reuters) - It is not possible to exempt the new German levy on gas from value added tax as Berlin wants, a European Commission spokesman said on Tuesday, but the EU executive wants to find a solution that would accommodate Germany's request in another way.

German Finance Minister Christian Lindner has asked the Commission to temporarily waive VAT on the new gas price levy to help Uniper and other gas importers cope with soaring prices due to reduced Russian export flows.

Because the levy is treated by EU law as part of the price, there has to be VAT on it, but that would raise even further the already high prices and inflationary pressures for customers.

"We share with Germany the wish that this measure does not have unintended tax consequences," Commission spokesman Dan Ferrie told a regular news briefing.

"There is no possibility to exempt that type of levy and that is why we are in contact with the German government to find solutions which would benefit and have the same effect for final consumers," he said.

(Reporting by Jan Strupczewski; Editing by Benoit Van Overstraeten)