Subsidy for new construction or renovation
(Updated July 16th, 2018)
We’re commonly asked whether subsidies are possible for new construction or renovation of a company building. We don’t know all local regulations (which can change on a monthly basis), but luckily all national subsidy regulations and fiscal actions are organised according to ‘Netherlands Enterprise Agency’ (english.rvo.nl).
Always check this website for the most recent information.
Generally, these are the most important regulations at this moment:
EIA (Energy Investment Allowance):
You can deduct 54.5% of the investment costs from the fiscal profits; after paying corporate taxes this can immediately result in tax profits of up to 13.5% of the initial investment, and when paying 52% income taxes it can even be up to 30%.
The energy list show what parts of a building are eligible, going through this list may take 10 minutes but can bring quite the advantages.
MIA (Environmental investment rebate):
For new construction of a company building it might be interesting to request MIA instead of EIA, because that can make the entire building eligible, instead of just certain parts. He percentage is lower (up to 36%, instead of 54.5%), but on balance the fiscal advantage might be larger.
For various (agricultural) projects (like sustainable or environmentally friendly stables and asbestos renovations in combination with solar panels) there exist specific regulations which can also be found at english.rvo.nl.
It could be interesting to have a newly constructed, sustainable company building assessed with a GPR or BREEAM score; with a sufficiently high GPR score (7.5 average) the complete investment could be eligible for MIA. The following example will clarify:
Let’s make an investment of €980,000 including installation, excluding the plot (a “GPR/BREAAM ready” building). Let’s add additional costs for the sustainability assessment and some small adjustments of €20,000. A total investment of €1,000,000.
The building is assessed as ‘sustainable building’; the ‘very sustainable’ variant is harder to achieve and would require more initial investments. It is also dependant on, among others, the location of the building, the surroundings and other external factors. The ‘sustainable’ variant is the standard in our building systems and is achievable, depending on the chosen installations and location of the building. Assuming a very conservative MIA of 13.5% gives us 13.5% * €1,000,000 = €135,000. €135,000 * 25% (corporate tax) = €33,750.
When a GPR score of 8.0 has been achieved (or BREAAM Excellent), a ‘very sustainable’ building, the MIA becomes 27%, or €67,500.
With a GPR score of 8.5 (or BREAAM Outstanding) you can get an MIA of 36%, or €90,000 direct fiscal advantage. Keep in mind that especially in installation technology, hard-surfacing, water retention, etc. extra investments need to be made and part f the fiscal advantage must be invested in reports and certificates, both before and after delivery. Also activities like waste separation and use of public transport play a part in this, which causes certification to be able to influence your business practices.
Starting 2016 company buildings are no longer eligible for VAMIL regulations, so these deductions are not possible anymore.
For more information you can always contact our advisors.