March 21, 2023
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Ireland’s first commercial electric bus was introduced at the beginning of February. The initiative was made possible through a partnership between ESB’s Smart Energy Services and the Crowne Plaza Dublin.
Investment in such energy efficient services will certainly benefit our environment, but for businesses there may be additional advantages for such investment. Advantages in the form of the Accelerated Capital Allowance (ACA).
The ACA is a tax incentive that rewards investment in energy efficient equipment by allowing companies and sole traders to deduct the full cost of such equipment from their taxable profits in the same year of purchase.
Section 46 of the Finance Act 2008 (The 2008 Act) provides that companies may claim 100% of the capital cost of certain “energy efficient equipment” including plant and machinery against corporation tax in the same year such equipment is purchased.
The 2008 Act defines energy-efficient equipment as,“equipment, named on and complying with the criteria stated on the specified list, provided for the purposes of a trade and which at the time it is so provided is unused and not second-hand”
Schedule 4A of the 2008 Act sets out the categories of energy efficient equipment applicable to the ACA tax incentive. A more comprehensive list of equipment that qualifies for the ACA tax incentive can be found on the Triple E Product Register.
According to the Department of Communications, Climate Action and Environment there are now almost 10,500 products on the ACA Register, covering 52 technologies.
With such a wide range of products now on the ACA Register, it’s worth investing in ACA-compliant products. However, business owners and decision makers should be aware that under the Finance Act 2018 the “relevant period” (in which one can avail of the ACA tax incentive) will run until 31st December 2020.
About the Author, Gríana O’Kelly – Partner, Corporate and Commercial Team.
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