Tax regulation mechanism I (Crédit d´impôt pour la transition énergétique)
Updated: 07.02.2019
Author: Helena Vidalic
Natural persons may deduce from income tax a certain percentage of investments in renewable energy plants. The tax credit (“crédit d'impôt”) for renewable energy plants applied until the end of 2012 (art. 200 quater, Code Général des Impôts). However, it is extended until the end of 2019 for installations carried out in buildings completed since more than two years (Art 23, Loi de finances 2017; art. 200 quater, Code Général des Impôts).
Please note: The Finance Act for 2016 enlarged the eligibility of the tax credit to hybrid solar systems producing both electricity and heat or hot water (art.106, loi de finances 2016).
Eligible technologies
The tax credit applies to the building-integration or purchase of all renewable electricity generation technologies except biogas (art.18 bis, Annex IV of the Code Général des Impôts).
| Aerothermal energy |
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| Hydrothermal energy | Heating plants as well as sanitary hot water installations are eligible, provided the energy performance of the filling device ranks between 65% and 85%, depending on the size of the installation (art.18 bis, Annex IV of the Code Général des Impôts). |
| Biomass | Heating plants as well as sanitary hot water installations using wood or any kind of biomass are eligible under following conditions:
The concentration of carbon monoxide and the energetic performance of the installations shall meet the requirements of the standards NF EN 13240, NF EN 14785, EN 15250, NF EN 13229 or NF EN 12815 (art.18 bis, Annex IV of the Code Général des Impôts). Wood-fired boilers with an energetic performance meeting the requirements of standards NF EN 303. 5 and EN 12809 with a maximum capacity of 300 MW are eligible. |
| Geothermal energy | Geothermal heat pumps are eligible, provided they comply with several requirements defined in article 18 bis, Annex IV of the tax Code regarding the coefficient of performance, the evaporation as well as the condensation temperature of the installations:
Geothermal heat pumps producing sanitary hot water are eligible, provided they meet the requirements defined in article 18 bis, Annex IV of the tax Code regarding the coefficient of performance and the water temperature. |
| Solar thermal energy | Expenditures in hybrid installations using solar panels for the production of electricity and heat are eligible for the tax credit, provided they meet the following conditions (Arrêté du 30 décembre 2015, in conjunction with art.18 bis, Annex IV of the Code Général des Impôts):
Expenditures in solar thermal installations for the production of sanitary hot water and /or heat are eligible for the tax credit, provided they meet the following conditions (Arrêté du 30 décembre 2015, in conjunction with art.18 bis, Annex IV of the Code Général des Impôts):
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Amount
- Persons that install renewable energy plants at their principal residence may deduce 30 % of the net hardware costs from income tax (art. 200 quater par. 1 c, 5 Code Général des Impôts).
- For solar energy installations, the tax credit applies to the solar collectors under the following conditions:
- For hybrid liquid circulation systems, the expenses eligible for the tax credit shall not exceed € 400 per m² of solar collectors, with a maximum surface of 10 m².
- For hybrid air circulation systems, the expenses eligible for the tax credit shall not exceed € 200 per m² of solar collectors, with a maximum surface of 20 m²
- For solar thermal installations using liquids producing only thermal energy, the expenses eligible for the tax credit shall not exceed € 1,000
- For solar thermal installations using air circulation producing only thermal energy, the expenses eligible for the tax credit shall not exceed € 400
- Caps for the period from 1 January 2005 to 31 December 2018 per principal residence: € 8,000 for individuals, € 16,000 for married or cohabiting couples (PACS) + € 400 per child; if they both have the duty of care: € 200 per child) (art. 200 quater par. 4 Code Général des Impôts).
- In multi-family houses, every resident may claim the money he invested (Tit. 28, chap. 1, sec. 1, BOI-IR-RICI-280-20180706).
Addressees
Entitlement to the credit is guaranteed by law. The tax credit may be claimed for investments in the main residence (Art. 200 quater Code Général des Impôts). All natural persons that are owners, tenants or rent-free tenants of their main residence are eligible (tit. 28, chap. 1, sec. 1, BOI-IR-RICI-280-20180706).
Procedure
Process flow | The tax credit is granted on income tax, after the eligible person has submitted the invoice for the investments and after other tax benefits and subsidies have been deducted. If the amount of the tax payable is lower than the tax credit, the difference will be paid out. If the applicant is not subject to tax, the total amount is paid out (Art. 200 quater Code Général des Impôts, tit. 28, chap. 3, sec. 1 BOI-IR-RICI-280-10-30-20180706). |
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Competent authority | Tax office (Direction Générale des Impôts, since 2008 named "Direction Générale des Finances Publiques") |
Distribution of costs
| State | The tax credit results in lower state revenue. Payments of the difference between the tax payable and the amount of tax credit are funded from the national budget. |
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France
