Dáil Éireann Debate, Tuesday - 21 May 2013
183. Deputy Richard Boyd Barrett asked the Minister for Finance with regards to the planned Dublin Array project, the tax that will apply if the project goes ahead; and if he will make a statement on the matter. [20200/13]
View answerI cannot comment on the tax affairs of an individual company, nor can I speculate on the taxation of an individual project. Generally speaking, companies operating in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities here. A higher 25% rate applies in respect of investment, rental and other non-trading profits, as well as certain petroleum, mining and land dealing activities, while chargeable capital gains are taxable at the capital gains tax rate of 33%.
I would add that there is a provision in the tax code that grants relief for investment in the generation of renewable energy and is set out in Section 486B of the Taxes Consolidation Act, 1997. Subject to certain limits and restrictions set out therein, any company that invests in renewable energy may qualify for this relief.
The renewable energy generation scheme was originally set up in 1999 and the tax relief applies to corporate equity investments in certain renewable energy generation projects. Qualifying investments are eligible for tax relief in the form of a deduction from a company’s profits.
To qualify for the relief the energy project must be approved by the Minister for Communications, Energy and Natural Resources and be in one of the following categories of technology:
- Solar
- Wind
- Hydro
- Biomass
The value of the investment on which relief can be given is capped at the lesser of:
- 50% of all capital expenditure, excluding expenditure on lands and net of grants, or
- €9.525 million for a single project.
Investment by a company or group is capped at €12.7 million per annum and unless the shares are held for at least five years by the company, the relief will be withdrawn. The purpose of the scheme is to encourage investment in renewable energy projects and to facilitate the growth of electricity generation capacity using these sources.
