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Tax benefit for environmentally friendly businesses
Do you invest in environmentally friendly assets or assets that are energy efficient or generate renewable energy? Then make sure to miss no tax benefit and register your investment in good time!
Three interesting tax benefits
A better environment and a sustainable energy economy, now and in the future, is important for our whole society. The Dutch government would therefore like to encourage investment in environmentally friendly appliances, energy-efficient equipment and sustainable energy. In this context, the Environmental Investment Deduction (MIA), the Random Depreciation of Environmental Investments (VAMIL) and the Energy Investment Allowance (EIA) have been created. Three interesting tax benefits by which substantial tax savings and substantial liquidity and interest rate advantages can be gained. Would you like to learn more about these tax incentives for environmentally friendly and sustainable businesses?
The Environmental Investment Deduction (MIA) provides an additional reduction in income tax/corporation tax for investments in environmentally friendly assets. This additional one-time reduction can be up to 36% of the investment and is in addition to the usual depreciation.
The Random Depreciation of Environmental Investments (VAMIL) provides the ability to write off against taxable profits 75% of an investment in an environmentally friendly company at random. It is up to you to determine how fast or slow to depreciate. So you can immediately write off 75% in the year of purchase, which could have a substantial liquidity and interest rate benefit. On the other hand, delaying the charge for your company can sometimes also be advantageous with a view to loss evaporation.
Under the Energy Investment Allowance (EIA), 41.5% of an investment in energy-efficient equipment and sustainable energy can on one occasion be charged against profit tax. As with the MIA, this additional deduction is additional to the usual depreciation.
To be eligible for the MIA, VAMIL and/or EIA, you must meet the following conditions:
- The minimum investment is € 2,500
- The asset must not have been previously used
- The asset must be entered on the Environment List (MIA/VAMIL) or the Energy List (EIA)
- The investment must be registered within 3 months after entering into an obligation with the National Netherlands Enterprise Council ("RVO")
Does your investment qualify for MIA, VAMIL or EIA? Then you can use the MIA, VAMIL or EIA application in your income tax/corporation tax.
It is not possible to apply both the EIA and the MIA to an asset.
The Netherlands has two types of income tax: income tax and corporation tax. But do you as a businessman know what form of income tax you have to pay? How much tax should you be paying? And where are the risks and opportunities for your company? The specialists from Mazars can help you with these questions.