Tax regulation mechanism I (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 aimed at the effective use of energy against tax (Article 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 technology/measure invested in. Investments of less than € 450 are ineligible (Article 3.45 (2) (b) Wet IB 2001). Furthermore, a total of maximum € 121 million can be invested in eligible projects within one year (Article 3.42 Wet IB 2001).

Eligible technologies

The Energy List, which is published by the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland), provides an overview of eligible RES-T investments.

Biofuels

Eligible for tax deduction in the framework of EIA No. 251205 is:

Biofuel production installation intended for the production of solid, liquid or gas fuels from ligneous or celluloid compounds in biomass whereby the energy carrier is used to generate heat or cold or as a transport fuel by means of pyrolysis, gasification, torrefaction, thermal degradation, chemical degradation or enzymatic degradation; and consisting of reactor in which one of the aforementioned processes is carried out, fermenter for the fermentation of C5 and C6 sugars (when installed).

Post-treatment equipment for the further processing of the reactor products and storage and transhipment facilities are not eligible.

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). 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 systems, energy-saving projects or technologies improving energy efficiency (Article 3.42 in conjunction with Article 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 webportal of Rijksdienst voor Ondernemend NederlandAgentschap. Companies have to apply for a tax reduction to the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend NederlandA).

  • 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.

Competent authority

Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland) and the tax authority.

Distribution of costs

State

The costs arising from the tax credit scheme are borne by the state, as it receives lower tax revenue.

Netherlands

Further information

  • Rijksdienst voor Ondernemend Nederland (RVO) - Netherlands Enterprise Agency
  • +31 88 042 42 42
  • Agency's website

Basic information on legal sources