The European Commission has approved an amendment to the Dutch tax incentives for green investment. The incentives are aimed at stimulating investment in projects that have a positive effect on nature and the environment in the Netherlands. The European Commission concluded that the various elements of the incentives are in accordance with both the Guidelines for state aid for agriculture, fisheries, and the environment, as well as the rules of the European Union Treaty with regard to state aid for the development of economic activities.
Together with social and ethical investments, green investments are exempt from the tax on deemed capital income in Box 3, up to a maximum of EUR 55,145 per taxpayer. There is also a tax credit of 1.3% of the Box 3 exemption, a maximum of EUR 717 per taxpayer, for green as well as social and ethical investments.
Green investments are shares in, profit-sharing certificates from, and cash loans to green funds that have been so designated by the tax inspector in a decision open to objection. The following may be designated as green funds:
- banks, if 70% or more of their aims and actual activities consist of providing credit to environmental projects, or direct or indirect investment of capital in such projects; and
- investment institutions, if 70% or more of their aims and actual activities consist of direct or indirect investment of capital in such projects.
Environmental projects (“green projects”) can be in the Netherlands or abroad; the important point is that the projects have been designated as green projects by Ministerial regulations. This is, at present, set out in more detail in the:
- Green Projects Regulation of 2005,
- Green Projects Abroad Regulation of 2002, and
- Green Projects in the Netherlands Antilles and Aruba Regulation of 2002.
The European Commission has now approved an amendment to the Green Projects Regulation of 2005. The amended regulation contains new project categories and amends a number of existing categories. The proposed amendments are to bring the regulation in line with the last ten years’ experience, the advancements made in environmental technology, and today’s policy priorities; the amendments will not alter either the underlying principles or the cooperation between investors, banks, and green projects. The projects are greatly diverse in nature, from the development and maintenance of natural areas, woods, and landscape to sustainable hydroculture, from the generation of sustainable energy to the construction of sustainable housing and industrial buildings.