Dáil Éireann Debate, Tuesday - 18 June 2013
280. Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources further to Parliamentary Question No. 506 of 11 June 2013, if he will provide details of the rate of tax applicable to profits generated by energy companies in general and those generating renewable energies in particular and if tax can be written off against previous investments. [29138/13]
View answerAll companies in Ireland pay the standard 12.5% rate of corporation tax on their trading profits arising in Ireland. A higher 25% rate applies in respect of investment, rental and other non-trading profits, and profits from certain petroleum, mining and other activities. Chargeable capital gains are taxable at the capital gains tax rate of 33%.
In terms of reliefs, Section 62 of the Finance Act 1998 as amended provides for a scheme of tax relief for corporate investments in certain renewable energy projects. It was inserted as Section 486B of the Tax Consolidation Act 1997, with effect from 18 March 1999. Since then, the scheme has been periodically extended to 31 December 2014. The relief applies to corporate equity investments in certain renewable energy generation projects, and is given in the form of a deduction from a company’s profits for its direct investment in new ordinary shares in a qualifying renewable energy company. To qualify for this relief, the energy project must be in the solar, wind, hydro or biomass technology categories, and must be approved by the Minister for Communications, Energy and Natural Resources. The relief is capped at the lesser rate of 50% of all capital expenditure (excluding lands) 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million per annum, and unless the shares are held for at least 5 years by the corporate investor, the relief shall be withdrawn.
Financial tax incentives, introduced in 2008, are also available for a wide range of energy efficient equipment through the Accelerated Capital Allowance (ACA) scheme. The scheme enables companies to claim 100% of the capital cost of certain energy efficient plant and machinery against corporation tax in the year of purchase. The range of technologies covered by the ACA scheme has been expanded to cover electricity provision technologies.
