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El Salvador Plans To Expand Tax Breaks For Renewable Energy

by Mike Godfrey, Tax-News.com, Washington

06 October 2015


El Salvador's Economy Minister and Chairman of the National Energy Council, Tharsis Solomon Lopez, presented a draft reform plans covering the tax incentive regime for electricity generation from renewable energy during a meeting of the Legislative Assembly on September 29, 2015.

The proposed reform involves expanding the list of natural resources and technologies that are eligible for tax incentives under the regime, taking into account newly developed technologies.

The draft reform also includes a proposal to remove the 10 megawatt limit for qualifying projects while providing greater benefits to small projects over longer periods.

In addition, the reform seeks to use tax incentives to encourage capacity expansion in existing projects. Currently the tax benefits only apply to new projects.

The Economy Ministry said that the proposed reforms would benefit companies participating in an upcoming auction for 150 megawatts of renewable energy capacity. It also said they will benefit solar, biomass, and gas projects currently under development.

The incentives provided under the current program include a ten-year exemption from import duties on equipment, materials, and inputs for construction work for renewable energy projects.

TAGS: Energy | tax | tax incentives | energy | tariffs | tax breaks | import duty | construction | El Salvador | Economy

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