Significant increase in corporate environmental investment

By 2021, companies will have invested significantly more in innovative environmentally friendly techniques and business assets that qualify for tax benefits. This is stated in the annual report MIA / Vamil published by the Dutch Business Agency (RVO). This annual report provides an overview of innovative environmentally friendly techniques and resources that companies have invested in 2021 with tax benefits from MIA / Vamil, and how much has been invested in different sectors. The government wants to stimulate investment in innovative business assets. The government is making investments in innovative environmentally friendly business assets extra attractive through two tax schemes: Environmental Investment Allowance (MIA) and Arbitrary Depreciation Environmental Investments (Vamil).

More sustainable investments

A total of 14,000 entrepreneurs submitted applications in 2021. MIA / Vamil has applied for a total investment of almost 3.5 billion euros. This is an increase of 24% compared to the previous year. The total amount that entrepreneurs receive through tax benefits with MIA / Vamil is expected to amount to 119 million euros in 2021. In 2020, this net tax benefit was still 90 million euros (an increase of more than 30 percent).

Environmental list

The basis for the schemes is the so-called Environmental List, a list of more than 300 business assets and investments that entitle to tax benefits according to MIA / Vamil. Examples are investments in circular construction, smart outdoor waste bins for waste prevention, software for registration and analysis of food waste and sustainable horse stables. The environmental list is adjusted annually by RVO. Whether a business asset is newly listed on the Environmental List depends on various criteria: A business asset must have significant environmental benefits (above the legal standard) and also be innovative (and therefore often more expensive compared to the usual alternative in the industry).

Great growth in 2021: circular economy

The circular economy (CE) component will be the largest producer in 2021 with almost three times as many reported investments compared to 2020. Circular production and CO2 reduction are receiving increasing attention from entrepreneurs. In 2021, the Environmental List for CE will be significantly expanded (147 CE-related assets in 2021 against 93 in 2020). Circular economy on the Environmental List contributes to techniques and operational resources aimed at reuse and recycling. For example: to make products and raw materials smarter and use them smarter (reject, rethink, reduce) and extend the life of the products (recycling, repair, repair, remanufacturing, recycling). Examples are recycling equipment, production equipment that saves raw materials and solutions for waste (water) collection and treatment. Within the circular economy component, investments in circular housing and circular commercial buildings in particular showed significant growth.

More than 1 billion euros in investments in the circular economy

Based on the 2021 environmental list, the total reported investment amount within the circular economy theme grew to 1,085 million euros. This is almost a third of the total investment amount reported on the basis of the Environmental List 2021. The net tax benefit on investments in the circular economy component thus amounts to almost 45 million euros. This is an increase of almost 150 percent compared to the net tax benefit based on the Environmental List 2020, accounting for 38% of the total calculated tax benefit in 2021 of all reported investments based on the Environmental List 2021 (total: 118.7 million euros).

How does the tax benefit work?

Vamil allows you to write off up to 75 percent of an investment at any one time. By depreciating in the year in which it is most convenient, the taxable profit decreases. Entrepreneurs must pay less income or corporation tax in the year in which they depreciate more. With MIA, entrepreneurs get an extra deduction option in the taxable profit. The deduction percentages for MIA in 2021 were 13.5%, 27% and 36% (these have been increased to a maximum of 45%). If an entrepreneur can also use MIA in addition to Vamilen, the net dividend from 2022 can increase to more than 14 percent of the investment amount.

Other industries

Sustainable mobility and agriculture remain important pillars of overall environmental investment. Fewer reports of sustainable mobility were received, but the total amount of tax benefits for entrepreneurs has remained largely the same. In terms of agricultural investment, it is striking that less was invested than in 2020. This may be due to the nitrogen measures and the consequences of the corona crisis, which made the investment climate in 2021 less attractive. Nevertheless, sustainability and innovation in agriculture remain an important part, receiving annual MIA / Vamil support.

Performance

The Ministry of Infrastructure and Water Management and the Ministry of Finance are responsible for the MIA / Vamil scheme. The Tax and Customs Administration and the Dutch Business Agency (RVO) are implementing the schemes. RVO supports the scheme with, among other things, a help desk, technical control of the reports, technical advice from the Tax Authorities and coordination of proposals for the Environmental List. Tax decides on the grant of MIA and / or Vamil.

New requests 2022

The new Environmental List 2022 was published in December 2021. Including new environmentally friendly equipment and techniques. Applications for 2022 are possible all year round via RVO.

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