The Dutch ministry of economic affairs, agriculture and innovation has recently announced that the government’s tax reduction accorded for investment in energy efficiency and in sustainable energy, the Energy Investment Allowance (EIA), has served to significantly reduce energy consumption and carbon dioxide emissions in the Netherlands.
Alluding to figures contained in its EIA annual report, the ministry explains that as a result of the tax reduction, companies in the Netherlands invested almost EUR1.5bn (USD1.8bn) in renewable energy and energy efficiency last year, 45% more than in 2010. The ministry says that the investments resulted in energy savings and carbon dioxide reductions equivalent to the emissions of 330,000 households.
According to the ministry, most requests for the tax break are from companies investing in energy efficient buildings, notably in heating pumps, insulation, energy efficient lighting and ventilation, while entrepreneurs invest mainly in renewable energy, with large investments made in wind energy, bio-energy and solar energy.
The ministry reveals that the costs of the tax reduction last year amounted to a total of EUR116m. Pointing out that entrepreneurs in the Netherlands currently pay an average of 25% profit tax, the ministry notes that the EIA tax relief measure provides for 41.5% of investment costs to be deducted from profit, resulting in a net benefit of about 10% of total investment.
The ministry underscored in its report that the government’s aim is to ensure that the production of energy from renewable sources is increased, in order to lower carbon dioxide emissions and to reduce the country’s dependence on energy from abroad. Without the EIA tax break, the costs of achieving this goal would be significantly higher, the ministry said..
TAGS: environment | tax | Netherlands | energy | entrepreneurs | tax breaks
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