The Environmental Investment Allowance makes it financially more attractive for businesses to invest in environmentally friendly assets. In addition, for some investments it is also possible to apply the VAMIL, which provides a liquidity and interest rate advantage.
Which environmental investments are eligible for funding?
The MIA is a tax relief scheme. The scheme offers an immediate financial benefit to business owners who invest in environmentally friendly business assets. The overview Environmental investment is divided into the following categories: “circular economy”, “food supply and agricultural production”, “mobility”, “climate and air”, “land use” and “built environment”.
Examples of eligible environmental investments include CO₂ emission-reducing facilities, dust emission-reducing technologies, soil remediation equipment, or materials comprising a certain percentage of recycled content.
Level of subsidy
Each type of investment is linked to a code that determines the amount of the grant. Investments whose code begins with a:
- F or G: 36% of the investment amount is eligible for an investment allowance;
- A or D: 27% of the investment amount is eligible for investment relief;
- B or E are eligible for an investment allowance amounting to 13.5% of the investment amount;
- In addition to the MIA, assets classified as A, B, C or F are also eligible for random depreciation (VAMIL). Business owners liable for income tax or corporation tax may depreciate a business asset on an accelerated, standard or deferred basis, or write it off in full in a single year under the 75% scheme, thereby generating a liquidity and interest rate advantage.
Calculation example: Environmental investment allowance
Suppose your taxable profit is €95,000 and you pay 20% tax on your company’s taxable profit. You invest €30,000 in a business asset listed in the Environmental List under code G. The deduction for code G is 36% of €30,000, which is €10,800. The taxable profit is now €95,000 – €10,800 = €84,200.
By making use of the MIA scheme, you will pay €16,840 in tax; without the MIA, this would be €19,000. Your immediate tax saving is therefore €2,160.
Main conditions
- The amount of environmental investment must be at least €2,500 per item of equipment.
- You must apply for the MIA within 3 months of placing the order for delivery.
- You are a Dutch business owner and pay income tax or corporation tax.
- The asset is listed in the environmental list. The list comprises equipment that has been proven to comply with the relevant standards.
- You cannot claim both the Energy Investment Allowance (EIA) and the Environmental Investment Allowance (MIA) for the same asset at the same time.
If you have any questions or if anything is unclear, please contact your adviser.
This article was produced in collaboration with Major Q. Major Q is a specialist in grant acquisition. You can find more information about Major Q here.
