Accelerated Capital Allowances for Electric Vehicles & Associated Charging Equipment

 

Capital Allowances allow a business to gain relief from Corporation Tax on money spent on capital equipment purchases such as vehicles. The relief is received by allowing the company to reduce its taxable income by an amount equal to the pre-tax value of the asset. The company therefore “writes down” the asset against profits. They normally must do this over an 8 year period so 1/8th or 12.5% of the capital value of the asset is written down each year until 100% write down has been achieved at the end of year 8.

The total value of the relief to the business is therefore equal to 12.5% of the pre-tax value of the asset. Under normal Capital Allowances, this total benefit accrues over an 8 year period so. 1/8th of the relief is received each year. 

Under the Department of Finance’s Accelerated Capital Allowance (ACA) scheme, 100% asset write down is permitted in year 1 allowing the full value of the tax relief benefit to be received in year 1 thus helping to stimulate a greater cash flow for the business. ACA is intended to stimulate businesses to buy more energy efficient products which include Electric Vehicles and their associated charging infrastructure. The ACA Scheme will be available until the end of 2017The general qualification criteria for products can be found at the following website:

http://www.seai.ie/Your_Business/Accelerated_Capital_Allowance/ACA_Categories_and_Criteria/

The ACA list is now incorporated into the Triple-E Register which is operated by SEAI. All EVs eligible for grants under the EV Grant Scheme will also be eligible for ACA. SEAI will automatically register EVs qualifying for the EV Grant Scheme with the ACA/Triple-E Register.

For more information and to view registered products please go to:

http://www.seai.ie/TripleE

 
For Business

In relation to Passenger cars registered after 1st July 2008, the maximum allowable capital expenditure to which tax relief can be applied is as follows:

  • CO2 Band A, B, C (<= 155g/km)  
    • Allowable Expenditure = 24,000euro regardless of the actual cost of the car
  • CO2 Band D, E (156 to 190g/km)  
    • Allowable Expenditure = the lesser of 12,000euro or 50% of actual cost of the car
  • CO2 Band F, G (> 190g/km)  
    • Allowable Expenditure = 0

For all other vehicles the full capital cost of the vehicle is allowable for the purpose of claiming Corporation Tax Relief. 

These limits apply regardless of whether an Electric Vehicle or a Plugin Hybrid Electric Vehicle is purchased and apply to both standard Capital Allowances and Accelerated Capital Allowances.

Please check latest figures with the Revenue Commissioners as these may be subject to change from time to time (see http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-and-corporation-tax/index.html).

For Vehicle Importers

As the requirements for qualification for the EV Grant Scheme exceed the requirements for qualification under the ACA Scheme, SEAI will automatically register all qualifying vehicles and Importers with the ACA/Triple-E Register.

Vehicle Importers will then be provided with a Triple-E product supplier account which may be used for submitting future models of vehicles which meet the requirements of the ACA scheme going forward.

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