Tax assistance with the energy transition
The energy transition is in full swing. Governments, investors and companies are accelerating the transition to a sustainable energy supply, driven by climate goals, regulations, geopolitical developments and economic opportunities. Renewable energy – wind, solar, storage and hydrogen – plays a key role in this. This transition may come with complex tax and legal issues, but at the same time it offers significant opportunities for value creation.
Renewable energy as investment category
Renewable energy has matured into a well-established and international investment segment. Institutional investors, infrastructure funds and private equity are increasingly allocating capital to sustainable energy projects, often in combination with real estate and infrastructure. For example:
- wind and solar parks (onshore and offshore)
- battery and other storage solutions
- heating networks (district heating) and sustainable energy infrastructure
- hydrogen and other power projects.
These projects are characterized by long lead times, regulated income flows and complex chains of developers, operators and financial backers. Tax structuring is essential in order to ensure return on investment, compliance and flexibility.
Tax considerations in the energy transition
The energy transition affects almost all taxes. Several important tax issues that need to be taken into consideration are:
Corporate income tax
- Structuring of (international) investments and SPVs
- Tax qualification of subsidies, guarantees and CFD rules
- Write-offs, interest deduction and loss set-off
- Impact of Pillar 2 and other international measures
Indirect taxes
- VAT position in the development, operation and transfer of energy assets
- Energy tax and storage of sustainable energy
- Customs and excise tax issues in cross-border energy flows
Real estate transfer tax and property
- Combining energy projects with real estate and infrastructure
- Asset deals versus share deals
- Integration of sustainable installations in existing structures
ESG and environmental taxes
- National and EU climate and energy taxes
- Plastic, CO2 and other environmental taxes
- Overlap between ESG reporting and sustainability goals
Tax opportunities and incentives
Besides tax considerations, the energy transition offers significant opportunities. Governments are actively encouraging sustainable investment through subsidies, tax relief and other incentives, both nationally and internationally. Meijburg & Co helps clients with, for example:
- identifying and leveraging tax incentives and subsidies
- optimizing taxes for sustainable investments
- combining ESG goals with return on investment goals
- establishing future-proof structures in a rapidly changing regulatory landscape.
Our approach
Meijburg & Co combines in-depth tax expertise with sector-specific knowledge of renewable energy, real estate and infrastructure. We have multidisciplinary teams working in the ESG and energy domains and help clients during the entire lifecycle of a project: from development and financing to operation, restructuring and exit. Through our international KPMG networks we can also help with cross-border projects and investment, whereby consistency, compliance and strategic flexibility are key.
Frequently asked questions
What are the tax benefits of investing in renewable energy?
Investing in renewable energy offers various tax benefits, such as the energy investment allowance (energie-investeringsaftrek; EIA) and the environmental investment allowance (milieu-investeringsaftrek; MIA), allowing you to deduct a significant portion of the investment costs from the profit for tax purposes. The free depreciation of environmental investments (willekeurige afschrijving milieu-investeringen; VAMIL) also offers flexibility in spreading out the tax burden. There are also exemptions and low rates for energy tax and the CO₂ tax on industrial emissions, as well as international benefits via double tax treaties and EU subsidies.
Which subsidies are available for sustainable energy projects in the Netherlands?
The Netherlands offers various subsidies for sustainable energy projects, including the Sustainable Energy Production and Climate Transition Incentive Scheme (Stimulering Duurzame Energieproductie en Klimaattransitie; SDE++) that helps companies in the generation of renewable energy and the reduction of CO₂ emissions. The subsidy for sustainable energy (Investeringssubsidie Duurzame Energie; ISDE) focuses on small-scale solutions, such as solar panels and heat pumps. In addition to this, there are the Energy and Climate Innovation Demonstration (Demonstratie Energie- en Klimaatinnovatie; DEI+) and regional subsidies. EU programs such as Horizon Europe and the Innovation Fund also provide help.
How can I prepare my company for tax-related changes resulting from the energy transition?
To prepare your company for tax-related changes resulting from the energy transition, it’s important to analyze the impact of new regulations such as Pillar 2 and the CO₂ tax on industrial emissions. Optimize tax structures by setting up SPVs and ensure you’re compliant in international projects. Identify tax opportunities and subsidies and integrate ESG goals into your tax strategy. Working together with multidisciplinary teams and international networks such as KPMG can help in tackling complex challenges.
