The Accelerated Capital Allowance (ACA) is a tax incentive which aims to encourage companies to invest in energy saving technology.The ACA allows companies to write off 100% of the purchase value of qualifying energy efficient equipment against their profit in the year of purchase.
The ACA is based on the existing Capital Allowances tax structure (also referred to as Wear and Tear Allowance) for plant and machinery and is only applicable to eligible energy efficient equipment. Claiming the ACA is also carried out the same way as for the standard Capital Allowances.
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You can download the ACA brochure here |
Benefits of the ACA
The ACA will benefit companies from year one by:
- Reducing their tax bill
- Increasing their cash flow
- Reducing their energy costs
How to claim the ACA
The following information should only be considered a guideline on how to make a claim. You should always refer to the
Irish Revenue Commissioners for definitive information on claiming the ACA.
How to use the ACA in 3 steps
1) Decide upon required piece of equipment
2) Ensure product is on the ACA specified list during relevant accounting period before purchasing.
3) Claim the ACA for the purchased equipment on the company’s tax return form
Eligible claim costs
- Accelerated Capital Allowances are available for costs directly related to the provision of the eligible equipment. Provision could be interpreted to include acquisition, transport and installation costs if they are directly related to the provision of the qualifying equipment.
- Where the energy-efficient equipment is part of a larger piece of otherwise ineligible equipment, only the eligible equipment can be claimed for.
- Expenditure within each equipment category must, at the end of the accounting period, be equal to or exceed the specified minimum amounts for each category (refer to ACA Categories and Criteria for details). Note: Minimum expenditure can be over a range of projects, procurements etc as it only relates to overall company ACA expenditure in the complete accounting period.
Claiming the ACA
- The ACA is claimed on the company’s return of income (form CT1). Since 2009 there is a seperate entry field for ACA alongside the standard capital allowances entry field.
- 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.
- Apart from the acceleration of the allowances to 100% in year one, the ACA is subject to the same rules as are applied to the standard wear and tear allowances for plant and machinery
- There is no requirement to obtain approval for expenditure on the energy-efficient equipment. The normal self-assessment tax provisions apply.
Important: If you are still unsure if you qualify for the ACA, or need help in making a claim, please speak to your taxation advisor and/or visit www.revenue.ie
