New energy-saving tax incentive for business
Energy Minister Eamon Ryan welcomed the introduction in the Finance Bill published today of a new scheme aimed at supporting investment in new energy-saving equipment by companies.
Section 42 of the Finance Bill introduces a new section into the Taxes Consolidation Act 1997. Capital allowances of 100% of the cost will be available to those companies investing in high energy-efficient equipment.
Expenditure on high energy-efficient equipment above a minimum figure in the three categories listed below will qualify for 100% accelerated capital allowances in the year of purchase.
Equipment covered by this incentive: Min. expenditure amount
Building Energy Management Systems €5,000
Lighting €3,000
Motors and Drives €1,000
This new tax incentive will encourage business to invest in energy-saving equipment. The scheme allows businesses to write off the whole cost of designated equipment against taxable profits in the year of purchase.
Welcoming the new incentive, Minister Ryan said, “Businesses are often tempted to opt for lowest cost equipment. However, such immediate cost savings often prove to be false economy. Investing in energy-saving equipment will reduce annual running costs through increased efficiency and lower energy bills every year for the lifetime of the equipment. It is also a straightforward way for business to improve its cash flow through accelerated tax relief.
Irish businesses face serious competitiveness challenges in the marketplace. Reducing energy costs is a key factor in improving Ireland’s competitiveness.
Saving energy is also one of the quickest and cheapest ways to reduce carbon emissions. Currently, we use far more energy than is required. This scheme will assist the business community in becoming more energy conscious and in reducing their overall environmental impact.
Now, businesses wishing to improve their cash flow, save in long-term energy costs and reduce their carbon emissions can do so in one fell swoop by availing of this new incentive.
It’s good news for the environment, for competitiveness and for the bottom line.”
The incentive will be in place for a period of 3 years until 31 December 2010.
© Drogheda Chamber of Commerce 2006. All Rights Reserved.
