In the revised national budget published today, the Government proposes changes in the adopted, not yet effective, rules on accelerated depreciations of wind power plants.
New Norwegian tax regulations for accelerated depreciations of wind power plants were proposed 12 May 2015 and adopted 19 June 2015 with effect for investments made after 1 January 2015, provided that EFTA Surveillance Authority (ESA) has clarified that the rules are in compliance with EU/EEA state aid rules. A pre-notification letter was sent to ESA 24 April 2015. The new rules will have effect from 1 January 2015. ESA approval is still pending. The Ministry of Finance sent a notification letter to ESA yesterday, which includes a description of the proposed amendments.
According to the new rules the main assets in wind power plants, acquired between 1 January 2015 and 31 December 2020 can be depreciated over 5 years, i.e. 20 % annually according to the straight-line depreciation method.
In the revised national budget published today, the Government proposes changes in the adopted, not yet effective, rules. The proposed amendments in the new rules for accelerated depreciations of wind power plants are:
- The effective date of the new rules are postponed to 19 June 2015, which is the date for the adoption of the new rules. This implies that the new rules will not be applicable for assets acquired before 19 June 2015. According to the Government, the proposal is required to ensure compliance with EU’s environmental and energy state aid guidelines.
- The new rules will be applicable also for assets acquired in the income tax year 2021.
- The new rules will be applicable only if “work on the project is not commenced before 19 June 2015”.
With respect to which activities that should disqualify the project from applying the new rules, the commentaries to the proposal refers to EU’s environmental and energy state aid guidelines, especially section 1.3 (44).3). According to the latter, "start of works" means either the start of construction works on the investment or the first firm commitment to order equipment or other commitment that makes the investment irreversible, whichever is the first in time. Buying of land and preparatory works such as obtaining permits and conducting preliminary feasibility studies are not considered as start of works. For take- overs, “start of works” means the moment of acquisition of the assets directly linked to the acquired establishment.