A package of fiscal measures aimed at boosting energy efficiency

On 19 October, Royal Decree-Law 18/2022 was published, approving fiscal measures to promote energy efficiency and transposing EU regulations on inverted hybrid asymmetries

Below, we briefly outline the measures aimed at strengthening the protection of energy consumers and reducing natural gas consumption in terms of the following taxes:

Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas)

With effect from 1 January 2023, the fiftieth additional provision of the Personal Income Tax Act, relating to the deduction for energy efficiency improvement works, is amended to extend its scope of application for a further year.

Corporate income tax

A new tax benefit “Freedom of depreciation on investments using energy from renewable sources” is introduced in the Tax Law. This benefit allows the free depreciation of investments in installations for self-consumption of electricity that use energy from renewable sources, and installations for thermal use for own consumption that use energy from renewable fossil fuel sources. However, its application is limited to a maximum investment amount of 500,000 euros. Finally, in order to apply this benefit, the entry into operation of the new installations must take place during 2023 and a series of requirements must be met regarding the average workforce of the entity and the consideration of “renewable energy”.

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