Energy: Government creates new tax incentive for self-consumption

The Government decided to strengthen the energy transition instruments, namely incentives for the production of renewable energy on a self-consumption regime or by small production units, up to 1MW of installed power, creating an exemption from IRS taxation up to an annual limit of 1,000 euros of income from the sale of surplus energy to the grid.

According to the report accompanying the proposed State Budget for 2023 (OE2023), this measure will have a budget cost of five million euros, and is intended for private or small businesses with installed renewable energy sources.

“Portugal is committed to achieving carbon neutrality by 2050, which will require an ambitious reduction in emissions and greenhouse gases (by 85% compared to 2005 emissions) and a carbon sequestration capacity of 13 million tons . Successfully achieving this objective will only be possible through the collective mobilization of all sectors of society, from families to companies, including the State”, the document reads.

To meet this goal, the Government will invest 2,100 million euros in the energy transition next year, which includes the creation of this incentive for self-consumption and the sale of surplus energy to the grid, but also the gradual end of exemptions from ISPs.

20% increase in IRC of energy costs
Following the adoption of the package of measures for companies ("Energy to advance"), in order to mitigate the effects of the rise in energy prices on the cost structure, the Government proposes an increase, in IRC, by 20% of expenditures and losses with electricity and natural gas, for the tax period beginning on or after January 1, 2022, in the part that exceeds the expenses and losses incurred in the previous tax period.

“Likewise, it is proposed, for 2022 and 2023, a 40% increase in expenses and losses incurred with the purchase of fertilizers, soil improvers, animal feed, other animal feed and water for irrigation, when used for production activities agriculture”, reads the document.

This measure should cover close to 500 thousand companies, with all companies “with the exception of energy producing companies” being addressed.

Source: Idealist