Just like the energy investment allowance (EIA) also includes tax incentive schemes for environmental investments assessed. As a result, these schemes will also be continued.
Environmental investments
There are two schemes designed to provide tax incentives for investment in environmentally friendly business assets. The environmental investment allowance (MIA) is, like the EIA, a deduction from taxable profit.
The abbreviation Vamil means Early Depreciation of environmental investments. That term no longer fully covers the scheme. For years now, there has been the option to random Depreciation on environmental investments. Business owners are free to decide when to charge the depreciation on environmental investments to their profits: either early or late.
You can read about exactly how both schemes work in our article Environmental Investment Allowance (MIA) and Voluntary Accelerated Depreciation (VAMIL). You can use both MIA and Vamil for an environmental investment. You cannot claim both MIA and EIA for a single asset.
PLEASE NOTE: apply in good time
When planning investments, it is often worth investigating (or having someone investigate) whether the MIA or the Vamil scheme can be applied. PLEASE NOTE: you must apply for these schemes. You must do so no later than 3 months after you have irrevocably entered into the investment commitment. You do this as soon as you sign the quotation or order confirmation.
An annual budget is set for the schemes. Once the budget has been spent, the schemes for that year are closed. That has not happened in recent years, however.
Freerider
The evaluation shows that the MIA and Vamil schemes are successful in influencing investors“ choices towards environmentally friendly business assets. Only a small proportion of investors would have opted for the environmentally friendly version of a piece of equipment even without the schemes. They are referred to in the evaluation as ”free-riders’. The researchers recommend taking the expected number of freeriders into account when drawing up the environmental list. This will help to limit overstimulation.
2018 Environmental List “revised”
The environmental list is revised annually. The digital environmental and energy list for 2018 can be found on the website of RFO. A few inaccuracies had crept into the 2018 update to the environmental list, which have recently been repaired. The correction, which applies retroactively from 1 January 2018, relates to the following items:
- steam cleaner with UV;
- low-emission farmyard on an arable or livestock farm;
- fully automatic keg or crate cleaner;
- mobile machinery with reduced air emissions;
- sustainable (refurbished) buildings.