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    The Netherlands’ Green Budget?


    In a bid to take substantial strides towards its climate goals, the Dutch government unveiled a series of legislative proposals and amendments concerning energy and environmental taxes on Budget Day.

    These measures are geared towards reducing the Netherlands’ greenhouse gas emissions by a commendable 55% by 2030, in alignment with the government’s climate ambitions.

    However, it’s essential to bear in mind that these proposals are subject to discussions, amendments, and adoption by the Dutch parliament.

    This article provides an in-depth look at some of those proposals covering:

    Corporate Income Tax


    From 1 January 2024, the energy investment deduction (EIA) rate will undergo a reduction, declining from 45.5% to 40%.

    Additionally, the sunset clause for energy and environmental deductions has been extended until 2028, implying that they will remain in effect, at least until that time.


    Energy Tax


    Energy tax exemption for metallurgical and mineralogical activities

    As of 1 January 2025, the energy tax exemption for electricity and gas used in metallurgical and mineralogical processes will be eliminated.

    The Dutch government views these exemptions as fossil subsidies, which no longer align with the nation’s climate objectives.

    New Specific Input Exemption for Hydrogen Production

    In addition, a new energy tax exemption will be introduced on 1 January 2025, for the supply of electricity used in hydrogen production via electrolysis.

    This exemption is confined to electricity utilized directly in the water-to-hydrogen conversion process, encompassing activities like demineralization, electrolysis, and the purification and compression of resulting hydrogen.

    Exemptions Related to Electricity Production

    Starting January 1, 2025, several changes are proposed regarding exemptions for electricity production, including cogeneration.

    Key changes include:

    Phase-Out of Special Energy Tax Rate for Greenhouse Horticulture Sector

    The reduced energy tax rate presently applicable to the greenhouse horticulture sector will be gradually phased out, commencing on 1 January 2025, and concluding in 2030.

    Changes to Energy Tax Brackets

    Effective from 1 January 2024, a new, lower bracket in the energy tax will be introduced for both electricity and gas.

    This bracket will cover the first 2,900 kWh of electricity and 1,000 m3 of gas.

    This adjustment is intended to provide the government with the flexibility to reduce energy tax for households when necessary, aligning with the current price cap for households.

    Amendments to Rules for Block Heating

    Various changes will be made to tax regulations for block heating, designed to accommodate the modifications in tax brackets mentioned above.

    Carbon Tax

    Increased Minimum Carbon Tax Price for Industrial and Electricity Generation Sector

    Starting January 1, 2024, the Dutch minimum carbon tax prices for the industrial and electricity generation sectors will rise. Despite these increases, the government anticipates no budgetary implications, given the existing EU ETS price. The new minimum prices are as follows:

    Introduction of a Carbon Tax for the Greenhouse Horticulture Sector

    Commencing January 1, 2025, a carbon tax will be introduced for CO2 emissions in the greenhouse horticulture sector, mirroring the current system in place for the industrial sector.

    This development coincides with the introduction of specific EU ETS obligations for the built environment.

    Coal Tax

    With effect from 1 January 2028, the coal tax exemptions for dual coal use and coal utilization for energy production will be discontinued.

    The current coal tax rate stands at EUR 16.47 per metric ton.

    Other proposals

    New information obligations will be incorporated into specific energy tax regulations to align with the European Commission’s guidelines on State Aid for climate, environmental protection, and energy.

    Commencing on 1 January 2024, these rules will encompass principles for providing data and information, upon request, to comply with EU obligations.


    The Dutch government’s commitment to climate goals is evident in these proposed tax changes, which seek to incentivize eco-friendly practices while gradually phasing out less sustainable measures.

    These proposals will be closely monitored as they make their way through the legislative process, potentially reshaping the landscape of energy and environmental taxation in the Netherlands.

    If you have any queries about the Netherlands’ Green Budget, or Dutch tax in general, then please get in touch.

    Zero VAT Rate for Solar Panels in Irish Homes


    In a significant move towards promoting renewable energy and reducing carbon emissions, the Irish Department of Finance made an exciting announcement on April 5, 2023. 

    Starting from May 1, 2023, a zero rate of value-added tax (VAT) will be applied to the supply and installation of solar panels in private dwellings. 

    This change was made possible by amendments to the Principal VAT Directive through Council Directive (EU) 2022/542 on April 5, 2022. 

    The Irish Revenue Commissioners have also released detailed guidance to ensure transparency and clarity for homeowners and businesses regarding the application of the zero rate of VAT.

    Scope of Application

    The zero rate of VAT applies specifically to the supply and installation of solar panels on or adjacent to immovable goods, which in this case refers to private dwellings. 

    This allows flexibility in the placement of solar panels, whether they are installed directly onto the private dwelling (e.g., on the roof) or mounted on the ground beside it. 

    The definition of “private dwelling” includes a wide range of residential properties such as houses, apartments, duplexes, and even immobilized caravans and mobile homes. 

    Essentially, any private dwelling that can be effectively immobilized qualifies for the zero VAT rate on solar panels.

    Conditions for Zero VAT Rate

    To be eligible for the zero rate of VAT, both the supply of solar panels and their installation must be carried out by the same business within the same contract. 

    This requirement emphasizes the importance of engaging a qualified and experienced contractor who can provide end-to-end solutions for solar panel installation.

    Limitations on Moveable Goods

    It’s important to note that while the zero VAT rate encourages the adoption of solar panels in private dwellings, it does not extend to moveable goods such as boats or mobile homes. 

    The focus of this initiative is primarily on immovable residential properties, ensuring that the zero rate of VAT applies specifically to homes.

    Key Takeaway

    The introduction of a zero rate of VAT for solar panels in private dwellings is a significant step towards achieving sustainable and eco-friendly homes in Ireland. 

    By reducing installation costs, this measure aims to incentivize homeowners to embrace solar energy and contribute to the nation’s commitment to carbon reduction. 

    The zero rate of VAT encourages the adoption of renewable energy sources, fostering a greener future for both individuals and the environment.


    The Irish government’s decision to implement a zero rate of VAT for the supply and installation of solar panels in private dwellings reflects their dedication to environmental sustainability and carbon reduction. 

    This initiative empowers homeowners to make a positive impact by transitioning to renewable energy sources and significantly lowering their carbon footprint. 

    With clear guidelines provided by the Irish Revenue Commissioners, homeowners can confidently explore solar panel installations and take advantage of the cost-saving benefits offered by the zero rate of VAT. 

    As countries worldwide strive for sustainability, the integration of solar energy in private dwellings will undoubtedly play a vital role in achieving a more eco-friendly society.

    If you have any queries about this article, or Irish tax matters more generally, then please do not hesitate to get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article

    Czech Windfall Profits Tax announced

    IntroductionCzech Windfall Profits Tax

    Last week, the Czech Republic’s Senate approved a proposed amendment in respect of a Windfall Profits Tax (WFT).

    Czech Windfall Profits TaxWhat is it?

    The WFT is based on the related Regulation of the Council of the European Union. However, the Czech Republic’s version differs from the European legislation in some key areas.

    Significantly, for the period in which the measure is engaged, it will introduce a 60% tax rate on ‘extraordinary profits’ as opposed to the 33% rate recommended by the EU.

    For those that meet the relevant conditions, this new 60% rate will apply for the period 2023 to 2025. This is on top of the standard corporate income tax (CIT) which is currently 19%.

    What are extraordinary profits?

    Extraordinary profits would be defined as the general income tax base exceeding the average of tax bases or tax losses for taxable periods beginning and ending between 1 January 2018 and 31 December 2021, plus 20%.

    This tax base would be subject to the 60% additional rate.

    The taxpayer will likely to be within the corporate income tax and generating income within the windfall profits tax of at least CZK 50 million in a taxable period falling at least partially within the “windfall profits tax application period” from 2023-2025.

    Taxpayers within the Czech Windfall Profits Tax


    There are three categories of taxpayers subject to the windfall profits tax.

    We will look at each, in turn, below.

    Category one – special activities

    Firstly, taxpayers who have income from the ‘relevant activities’ that include:

    This is provided that the income qualifying for WFT from these activities for the first accounting period ending on or after 1 January 2021 accounted for at least 25% of their annual total net turnover. 

    Category two – general category

    Taxpayers generating income from the following activities:

    In the windfall profits tax application period the taxpayer is part of a corporate group. Here, they will be within its scope where the sum of the relevant income of all taxpayers within the group for the first accounting period ending on or after 1 January 2021 of at least CZK 2 billion.

    Alternatively, an entity records income qualifying for the windfall profits tax of at least CZK 2 billion for the first accounting period ending on or after 1 January 2021

    Category three – banks

    The income qualifying for the Windfall Profits Tax is net interest income.

    Where net interest income for the first accounting period ending on or after 1 January 2021 exceeds CZK 6 billion while meeting the general precondition of having generated net interest income for the relevant taxable period of at least CZK 50 million, then they are within the scope of WFT.

    When is the Czech Windfall profits tax paid?

    The first payments of WFT should be made in the latter half of 2023. These payments will be based on the estimated tax reported for the last taxable period ending before 1 January 2023.

    This report must include information they would have recorded in their windfall profits tax return and use this information to determine what payments are required.

    The report should be submitted by 3 July 2023 at the latest.

    If you have any queries about the Czech Windfall Profits Tax or Czech tax matters more generally, then please do not hesitate to get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article