Accelerated Capital Allowance (ACA): Boosting Investment in Energy-Efficient Equipment and Vehicles

You don’t need to be an accountant to understand the substantial tax incentives available for electric vehicles (EVs) under Ireland’s Accelerated Capital Allowance (ACA) scheme. By switching to EVs, both Limited Companies and Sole Traders can see immediate savings and cash flow benefits.

Key Highlights of ACA for Electric Vehicles:

  • Eligibility: ACA is available for new 100% electric vehicles (EVs) purchased by Limited Companies and Sole Traders.
  • Deduction Cap: Businesses can claim the lower of the vehicle purchase price or €24,000 against trading profits in the year of purchase.
  • Immediate Savings: The entire capital allowance tax saving is realised in Year 1 for EVs. In contrast, conventional vehicles take up to 8 years to reach equivalent savings.
  • Additional Benefits: EV owners enjoy perks like half-price tolls, cash flow benefits from tax savings, and potential tax deductions for charging stations, typically costing around €1,500.

To learn more about the BIK savings for both employees and employers, see our in-depth article here.


The Accelerated Capital Allowance (ACA) is a tax incentive scheme designed to encourage investment in energy-efficient products and equipment. Based on Ireland’s traditional 'Wear and Tear Allowance' for capital plant and machinery, the ACA allows businesses to reduce their taxable profits by the value of qualifying energy-efficient purchases in the first year, unlike the Wear and Tear Allowance, which spreads this benefit over eight years.

Key ACA Benefits for Electric Vehicles and Energy-Efficient Equipment:

  • Who Qualifies? Sole traders, farmers, and companies paying corporation or income tax on trading or professional income in Ireland can claim ACA.
  • How It Works: ACA allows eligible businesses to deduct the full cost of qualifying equipment from profits in the year of purchase. This includes electric and alternative fuel vehicles, with an allowance capped at the lesser of €24,000 or the actual cost of the vehicle.
  • Use Requirements: The equipment or vehicle must be new and purchased specifically for business use. Leased, rented, or hired equipment does not qualify.
  • Time Period for Claim: ACA is applicable for the accounting period in which the equipment is first used, as long as it appears on the published Triple E register during that period.
  • Eligible Costs and Minimum Expenditure: Only direct costs for acquiring the equipment qualify for ACA. Minimum expenditure requirements apply and vary by technology class (see the Triple E register for specifics).

Steps to Claim ACA:

  1. Select the necessary equipment or vehicle.
  2. Verify eligibility by checking the Triple E product register.
  3. Claim ACA on your company's CT1 form, which now includes a specific ACA field alongside the standard capital allowances entry.

Rules and Qualifications:
The ACA follows the same rules as the standard plant and machinery wear and tear allowance, with the key difference of an accelerated 100% deduction in the first year of purchase. Normal self-assessment tax provisions apply, and no special approval is needed for energy-efficient equipment expenditure.

If you're unsure about eligibility for the ACA, consult your tax advisor or visit revenue.ie for further details.

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