Tax Reduction for Renewable Energy Equipment
Investment costs in renewable end-use technology are deductible from the income tax. The limit to the deduction set in 2000 was PTE 50,000. From 1999, investors in equipment using solar energy are also entitled to claim a depreciation rate of 25%.
Private investors receive tax credits for investing in renewable energy by the Ministry of Finance. This favorable taxation of the personal income tax is directed at stimulating investment in renewable energy technologies. All individual private investors who are liable to pay income tax are eligible to deduct up to 30% of any type of investment in renewable energy technologies. The maximum amount is € 700 per year.
Regulatory Decree No. 22/99
The "Accelerated Depreciation on Solar Thermal Equipment Investment Scheme" complements the investment subsidy programs by facilitating market penetration and encouraging diffusion of solar thermal systems. The scheme makes investment in solar thermal equipment more attractive by providing tax incentives for all companies who invest in solar thermal systems. Companies benefit in terms of their cash and interest position since they can write off the investment in solar equipment in only 4 years. The accelerated depreciation keeps taxable income down so companies pay less income or corporation tax. All companies liable to pay income or corporation tax in Portugal and investing in solar thermal equipment are eligible for the scheme.