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Netherlands

Netherlands

Tax inspectors say no way, Government policy snagged

In a further blow to the already beleaguered private sector of the Dutch wind community, the country's tax inspectors have got together and decided that individual turbine owners are not automatically eligible for tax relief under the country's new scheme for accelerated depreciation on environmental investments, VAMIL. The decision effectively drives a coach and horses through government wind energy policy.

VAMIL is one of the fiscal measures introduced by the economic affairs ministry as a means of stimulating investment in wind development after government subsidies to the sector were cut in 1996. Under the scheme, companies are able to write off investments in certain types of equipment earlier than with normal depreciation. This keeps down their taxable income in the early years of the investment, thus improving liquidity.

In practice, however, a number of would-be private wind plant developers -- particularly farmers -- have had their appeals for relief turned down on the grounds that owning a wind turbine is not a part of their core business, but rather an investment which is not eligible under the VAMIL scheme.

At a recent meeting of tax inspectors, it was confirmed that only registered companies were automatically eligible for relief under VAMIL and that applications from private investors should continue to be decided on a case by case basis. The Ministry of Economic Affairs has reacted with surprise to the decision and talks are being held with the finance ministry aimed at resolving the situation.

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