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:
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:
Steps to Claim ACA:
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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