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January 31, 2008

New Energy-saving Tax Incentive for Business

Energy Saving LightDeputy Michael Fitzpatrick, together with 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.

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.

In welcoming this new incentive, Deputy Fitzpatrick said,

“Irish businesses face serious competitiveness challenges in the marketplace. Reducing energy costs is a key factor in improving Ireland’s competitiveness.”

Also speaking as a new member of the Committee on Environment, Heritage and Local Government, I have become acutely aware that 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.”

Please note:
The list of equipment will be established, and may be amended, by order of the Minister for Communications, Energy and Natural Resources. Sustainable Energy Ireland will be responsible for maintaining the list.
The scheme will be confined to new energy-efficient equipment purchased by companies and will not apply to equipment that is leased, let or hired.