Accelerated Capital Allowance

The Accelerated Capital Allowance (ACA) encourages companies to invest in energy saving technology, allowing companies to write off 100% of the purchase value of qualifying energy efficient equipment against their profit in the year of purchase. Introduced in the Finance Act, 2008 for three year trial period and extended extended until 2014 in Finance Act, 2010 it is based on existing Capital Allowances tax structure. It benefits companies by reducing tax bill, increasing cash flow and reducing energy costs.

With the Accelerated Capital Allowance, when money is spent on “Eligible energy efficient capital equipment”, the company can deduct the full cost of this equipment from their profits in the year of purchase, i.e. the taxable profit in year one is reduced by the full cost of the equipment.

Eligibility

Be a company operating in Ireland, pay Irish corporation tax, the equipment purchased is new and bought on or after 31 January 2008.

The ACA can be claimed for the accounting period in which the equipment was first provided and used for its trade provided that the equipment is included on the published list at some stage during that accounting period. The equipment was bought for use in a trade and is not leased, let or hired to any person. 

Expenditure on a class of technology must, at the end of the accounting period, be equal to or exceed the minimum amounts for each class of technology as set out in the legislation (see table below). Note: Minimum expenditure can be over a range of projects, procurements etc as it only relates to overall company expenditure on BEMS technologies in the accounting period.

For further details about ACA, please visit Sustainable Energy Authority of Ireland website or download ACA brochure here.