Accelerated Capital Allowances (ACA)
The Accelerated Capital Allowance (ACA) is a tax incentive scheme that promotes investment in energy-efficient products & equipment. The ACA is based on the long-standing ‘Wear and Tear Allowance’ for investment in capital plant and machinery, whereby capital depreciation can be compensated through a reduction in an organisation’s tax liability.
The ACA scheme allows a sole trader, farmer, or company that pays corporation tax in Ireland to deduct the full cost of the equipment from their profits in the year of purchase. As a result, the reduction in tax paid by the organisation in that year is currently 12.5% of the value of capital expenditure.
By contrast, the Wear and Tear Allowance provides the same tax reduction, but this is spread evenly over an eight-year period. Under the Energy Efficiency Obligation Scheme, energy suppliers must support energy efficiency projects in businesses and homes across Ireland.
Energy credits are available from utility energy suppliers for every kWh of energy saved.
Companies that sell large amounts of energy are known as obligated parties and they have targets under the scheme. Obligated parties offer supports to make your home or business more energy-efficient. For every unit of energy saved through these projects, they achieve energy credits towards their targets. This will help Ireland to reach national and European energy-saving targets.