Tax Incentives Case Study
MILJÖFUNN - A NEW TAX INCENTIVE SCHEME FOR RETAILERS IN THE SERVICE SECTOR
What investments are eligible to be subsidised by MiljøFUNN?
Investments have to fulfill certain criteria in order to be eligible for the subsidy. The different criteria will be named, further defined and explained and justified in the following.
1. For an investment to be eligible for tax incentives under this scheme, it must have a clear positive effect on the environment compared to the current state of development in the related area. For instance, an investment in an equipment that uses electricity must be able to consume far less electricity than the old equipment being replaced.
There are three areas under which investment will be considered for tax incentives …show more content…
Subsidising environmental investment that cost the same as its environmentally-friendly alternative would not be considered as an incentive because with or without the scheme, the companies can afford it.
Explain why we included this criterion. What do we want to achieve? Why don’t we want to subsidise something if it costs the same? What do we want to prevent from happening by including the criterion?
How does the incentive provided by MiljöFUNN look like?
1. The scheme will allow eligible companies to deduct up to 30% of tax on the cost of an environmentally friendly investment. And the maximum eligible costs taken into consideration are NOK 15 million per year.
We can’t explain this for now, as we lack the responses from the businesses, but based on their answers we will have to come up with a percentage and again we will have to justify that percentage with the data we obtained.
2. If the tax credit for the environmental investment is greater than the amount the firm is liable to pay in tax, the remainder will be paid out in cash to the firm. This is to encourage newly established companies under the service sector to know that even if they might not be generating taxable income, they would still receive the MiljöFUNN in full by cash.
Explain why we included this criterion. What do we want to …show more content…
The receipt must have the stamp of the company that sold the item, the date, the description of item purchased, quantity and amount.
3. Clear documentation of how much energy/water/waste is going to be saved
The applicant must provide a documentation on its current energy or water consumption or current strategy in place to reduce waste and also prove that the environmental investment to be considered for incentives has the capacity to save energy, water or reduce waste.
How is the Miljöfunn scheme organised?
The Miljöfunn scheme will be an integral part of SkatteFUNN. Looking at the framework of the SkatteFUNN, it will be easier to have it as a branch. It will also help to save cost as there will be no need to establish a new structure. The experiences and skills of the people behind the SkatteFUNN can be employed to run the Miljöfunn scheme smoothly.
What is the total size of the fund?
NOK 800 million is available per year. The scheme is no longer used when the budgets are exhausted. It is also possible to transfer excess budget to the following year. The Minister of Finance can limit or suspend the scheme if there is a good
What investments are eligible to be subsidised by MiljøFUNN?
Investments have to fulfill certain criteria in order to be eligible for the subsidy. The different criteria will be named, further defined and explained and justified in the following.
1. For an investment to be eligible for tax incentives under this scheme, it must have a clear positive effect on the environment compared to the current state of development in the related area. For instance, an investment in an equipment that uses electricity must be able to consume far less electricity than the old equipment being replaced.
There are three areas under which investment will be considered for tax incentives …show more content…
Subsidising environmental investment that cost the same as its environmentally-friendly alternative would not be considered as an incentive because with or without the scheme, the companies can afford it.
Explain why we included this criterion. What do we want to achieve? Why don’t we want to subsidise something if it costs the same? What do we want to prevent from happening by including the criterion?
How does the incentive provided by MiljöFUNN look like?
1. The scheme will allow eligible companies to deduct up to 30% of tax on the cost of an environmentally friendly investment. And the maximum eligible costs taken into consideration are NOK 15 million per year.
We can’t explain this for now, as we lack the responses from the businesses, but based on their answers we will have to come up with a percentage and again we will have to justify that percentage with the data we obtained.
2. If the tax credit for the environmental investment is greater than the amount the firm is liable to pay in tax, the remainder will be paid out in cash to the firm. This is to encourage newly established companies under the service sector to know that even if they might not be generating taxable income, they would still receive the MiljöFUNN in full by cash.
Explain why we included this criterion. What do we want to …show more content…
The receipt must have the stamp of the company that sold the item, the date, the description of item purchased, quantity and amount.
3. Clear documentation of how much energy/water/waste is going to be saved
The applicant must provide a documentation on its current energy or water consumption or current strategy in place to reduce waste and also prove that the environmental investment to be considered for incentives has the capacity to save energy, water or reduce waste.
How is the Miljöfunn scheme organised?
The Miljöfunn scheme will be an integral part of SkatteFUNN. Looking at the framework of the SkatteFUNN, it will be easier to have it as a branch. It will also help to save cost as there will be no need to establish a new structure. The experiences and skills of the people behind the SkatteFUNN can be employed to run the Miljöfunn scheme smoothly.
What is the total size of the fund?
NOK 800 million is available per year. The scheme is no longer used when the budgets are exhausted. It is also possible to transfer excess budget to the following year. The Minister of Finance can limit or suspend the scheme if there is a good