Wednesday, 9 October 2013

Questions (58)

Dara Calleary


58. Deputy Dara Calleary asked the Minister for Finance the tax breaks available to wind turbine owners; and if he will make a statement on the matter. [42548/13]

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Written answers (Question to Finance)

With regard to VAT, persons who are registered for VAT are entitled to claim input credit for VAT charged on the installation of a wind turbine for use in their taxable activities. In addition, the VAT (Refund of Tax) (Flat-rate Farmers) Order 2012 provides that flat-rate farmers, who are not registered for VAT, can claim a refund of tax borne on the purchase of a wind turbine for the purposes of micro-generation of electricity for use in a farm business, where that wind turbine was purchased on or after 1 January 2012.

In addition, companies carrying on green energy activities (i.e. activities undertaken with a view to producing energy from renewable resources) can qualify for the Employment and Investment Incentive.

There is also corporation tax relief for corporate investment in renewable energy.

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.

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 and 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 €9.5 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at €12.7 million per annum and unless the shares are held for at least five years by the company, the relief will be withdrawn.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 qualifying period for the scheme of tax relief for corporate investment in certain renewable energy projects runs until 31 December 2014.