Energy transition

Tax Position of the Investment

Corporate Income Tax

We often observe that wind farms issue shareholder loans in various tranches with varying interest rates. For instance, the interest rate may fluctuate based on wind production or the wind farm’s EBITDA. To ensure clarity regarding the deductibility of this (profit-sharing) interest from the taxable result, it is important for the cash flows of the wind farm to be certain in advance. The specialists at HVK Stevens can provide you with information on the contours of this matter. Additionally, it is crucial to have a clear understanding of the timing and manner in which items like pre-completion revenues or depreciation should be treated for tax purposes. To provide shareholders and banks with as much certainty as possible, we advise coordinating these aspects related to corporate income tax with the Tax Authorities in advance.

VAT (Value Added Tax) and Real Estate Transfer Tax

In addition to corporate income tax, VAT and real estate transfer tax are also significant focal points. Supplying generated electricity to an energy supplier will often qualify as an economic activity for VAT purposes. Generally, this will also grant the right to deduct VAT. If the right to deduct VAT exists during the construction of your wind farm, the operator can choose to file monthly VAT returns (rather than quarterly). This allows for a quicker VAT refund. In case you intend to transfer the economic and legal ownership of the wind turbines within the group after project completion, real estate transfer tax may be applicable. Our specialists are ready to assist you in finding a suitable solution for your situation.

Deduction Facilities for Sustainable Investments

For entrepreneurs investing in environmentally friendly and/or energy-efficient assets, it can be advantageous to utilize various deduction facilities. By applying the Environmental Investment Deduction (MIA), either in combination with the Accelerated Depreciation (Vamil) or the Energy Investment Deduction (EIA), up to 45.5% of the incurred investment costs can be deducted from the taxable profit of the company. This can lead to a substantial tax advantage. To be eligible for the MIA/Vamil or EIA, it is important that the specific investment is listed on the 2022 Environmental List or the 2022 Energy List, respectively. We are more than willing to assess whether your investment could yield an additional tax benefit.

Tax Position of Shareholders

Furthermore, we frequently observe that local residents are offered the opportunity to participate in wind farm projects, while the investors retain decision-making authority. The specialists at HVK Stevens are here to assist you in shaping this structure and assessing its tax implications.