Tax regulation mechanisms II (Energy Investment Allowance, EIA scheme)
Updated: 09.01.2019
Author: Stijn Anciaux
This tax benefit enables entrepreneurs based in the Netherlands to write off investments in renewable energy plants against tax (art. 3.42 Wet IB 2001). The eligibility criteria are extensively described in the Energy List. The level of funding depends, among other things, on the source of energy and the type of plant used. Investments of less than € 450 are ineligible (art. 3.45 (2) (b) Wet IB 2001). Furthermore, a total of at least € 2,300 (and at most € 121 million) must be invested in eligible projects within one year (art. 3.41 (2) and 3.42 (4) (a) Wet IB 2001).
Eligible technologies
Not many RES-E technologies are still eligible since 2018. Published annually by the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland), the Energy List provides an overview of eligible investments in renewable energy.
| Wind energy | Not Eligible, only for windwatermills (pumping of water by the use of wind force). (Energy List 2018 no. 251206) |
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| Solar energy | Only PV is eligible. - PV connected to the grid: eligible for a maximum of €750 per kW (Energy List 2018 no. 251102)
- PV not connected to the grid: eligible for a maximum of €1,000 per kW (Energy List 2018 no. 251116)
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| Biomass | Eligible (Energy List 2018 no. 251105) |
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Amount
The amount of tax credit may be up to 54.5% of the total investments made in renewable energy or energy-efficiency technologies within one year (art. 3.42 (3) Wet IB 2001). The eligible technologies are published in the Energy List, which is updated on an annual basis. The maximum project costs per company are € 121 million per calendar year (art. 3.42 (4) Wet IB 2001). Investments of less than € 450 are not eligible for the tax credit (art. 3.45 (1) (a) Wet IB 2001). The total sum of investments in eligible projects shall reach at least € 2,300 within one year (art. 3.41 (2) Wet IB 2001). The Minister of Finance may reduce the amount of tax credit or reject applications if the expenses threaten to exceed the budget provided. His decisions are published and do not affect tax credits already granted.
Addressees
Entitled party. The entitled parties are enterprises that invest in renewable energy plants, energy-saving projects or technologies improving energy efficiency (art. 3.42 in conjunction with art. 3.43 Wet IB 2001). Private individuals are not entitled to tax benefits.
Procedure
Process flow | As confirmed by the Netherlands Enterprise Agency tax credits are awarded according to the following procedure: - Application through the webportal of the Netherlands Enterprice Agency (Rijksdienst voor Ondernemend Nederland). Companies have to apply for a tax reduction to the Netherlands Enterprise Agency, Rijksdienst voor Ondernemend Nederland
- Evaluation and award. The Netherlands Enterprise Agency evaluates the application and – if necessary – makes inquiries to the applicant, the energy agency approves the application
- Final decision. The tax authority has the last say, i.e. it may decide to authorise the tax credit awarded by the energy agency in full or only in part.
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Competent authority | Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland) and the tax authority. |
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Distribution of costs
| State | The costs arising from the tax credit scheme are borne by the state, as it receives lower tax revenue. |
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Netherlands
