What is the Energy Investment Allowance – EIA, and how does it work?

The Energy Investment Allowance (EIA) is a tax relief scheme designed specifically to encourage companies in the Netherlands to make greener choices. Here's how you can leverage this opportunity.

Do you know how your business can benefit significantly from investing in energy-efficient technologies and sustainable energy solutions in the Netherlands? The Energy Investment Allowance (EIA) is a robust tax relief scheme designed specifically to encourage companies like yours to make greener choices. Here’s how you can leverage this opportunity to enhance your business’s sustainability while enjoying financial benefits.

What exactly is the EIA?

The EIA allows businesses to gain tax advantages when they invest in designated energy-efficient technologies. For 2024, the Dutch government has allocated a substantial budget of €259 million to support this initiative. The average tax reduction benefiting companies is around 10%, but the actual boon comes from being able to deduct 40% of the investment costs directly from your taxable profit. This is in addition to the usual depreciation.

Who can benefit?

This scheme isn’t for everyone. It’s tailored specifically for entrepreneurs operating within the Netherlands and its territories, including Aruba, Curacao, Sint Maarten, or the BES Islands. To qualify, your business must be liable for income or company tax, and the investment must be listed on the official Energy List as a “company resource” that hasn’t been used before.

The energy list: your guide to qualifying investments

If you’re wondering whether your investment qualifies, you’ll need to consult the Energy List for 2024. This list details all the technologies and innovations eligible for EIA benefits. Investments can be specific, such as those clearly defined in the list, or generic, which are tailor-made solutions that lead to substantial energy savings.

What if your investment isn’t listed?

Don’t worry if your desired technology isn’t on the Energy List. You have options! You can either find a generic code under which to report your investment or propose your technology to be included in next year’s list by submitting a proposal by September 1, 2024.

Applying for the EIA

To take advantage of the EIA, you must act swiftly. Applications must be submitted within three months of commissioning the investment and can only be done digitally. Detailed guidance on the application process can be found on the Dutch government’s official “How to Apply” page.

Managing your financials with EIA

Incorporating EIA into your financial administration is straightforward but requires precision. Whether your investment costs were incurred in a single year or spread over several, you need to detail these when filing your tax forms.

The EIA not only lowers your tax burden but also reduces your energy costs, enhancing your company’s profitability and sustainability in one go.

Do you think the Energy Investment Allowance could change how your business invests in energy solutions? How might you implement this in your strategic planning for sustainability and financial efficiency?