The TSG Budget 2023 papers were published on August 10 2022. The TSG is a government think tank chaired by the Department of Finance and the published papers cover everything from income tax to EU developments to climate change.
Various groups, including Deloitte, have called for several tax measures to promote private investment in renewable energy – be it through funding or technological advancements.
Whilst the TSG Budget papers on ‘Climate Action and Tax’ reflect the operation of various excise duties, carbon tax measures and fuel related provisions there has been little in the way of recommendations to government when it comes to the stimulation many people are calling for to aid Ireland in meeting its 2030 climate goals, and indeed reduce Ireland’s reliance on foreign gas and oil to meet Ireland’s energy demands.
What can Budget 2023 contain to address this?
Corporate tax relief
Irish legislation previously provided corporate tax relief for equity investment in companies involved in renewable energy generation. This relief was introduced in Finance Act 1998 but was withdrawn in 2014. The relief was given in the form of a deduction from a company’s profits for its direct investment in new ordinary shares in a qualifying renewable energy company.
Coupled with the participation exemption regime Ireland operates on the sale of qualifying shares, such an additional relief will provide real-time benefits for companies who help fledgling renewable energy companies who are crying out for investment to realise their pipeline of renewable energy projects.
Promoting investment
Speaking of the participation exemption regime, Ireland is not in line with the UK when it comes to promoting investment in renewable energy companies, and this must be changed.
The sale of shares in a project company hosting an early-stage renewable project may not be in a position to claim the participation exemption as in Irish Revenue’s view the company may not be considered trading (broadly, that the project company should be trading is one of the conditions required for the participation exemption to apply). Revenue practice is to view trading as commencing when the project company commences producing electricity.
The participation exemption should be extended to the sale of companies that host early-stage development projects, i.e. that trading activities include activities for the purposes of a trade that a company is preparing to carry on. This will allow Ireland to be competitive when it comes to a jurisdiction for investors to deploy their capital when considering their green investment agendas.
Innovation hub
As Ireland expands its onshore wind, offshore wind (both fixed and floating), solar and biofuel industries, there is likely to be significant investment in research, development and innovation. With the proper incentives, Ireland could become an innovation hub for renewable energy. The R&D regime should be reviewed to ensure that it is first in class.
Incentivisation
Spending on green low consumption technology and buildings with recognised accreditation should be incentivised by way of super deductions or accelerated capital allowances.
The TSG Budget papers are simply a list of options and issues to be considered in the budgetary process and not binding on government decisions, however, it is disappointing that the incentivisation of private investment in renewable energy businesses and technologies are not to the forefront of the group’s recommendations to government.
If Ireland is to meet its climate goals, and also tap in to its expertise in technological advancement, it is important that the government take steps to kick-start investment.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
