What are the tax issues relating to wind farms?

Julie Butler looks at various tax issues concerning wind farms. With the increased number of “wind farms” and the increased income arising from wind turbines the question is being asked what are the Income Tax, Inheritance Tax (IHT) and Capital Gains Tax (CGT) positions relating to the asset and the income?

Are wind turbines taxable?

Where the wind turbine is not part of a domestic installation, then the income from the turbine will be taxable. HM Revenue & Customs have confirmed that where a turbine is installed to offset a farm’s electricity costs the income can simply reduce the electricity expense in the accounts.

How is wind power taxed?

In the case of wind power, in terms of section 12B of the Income Tax Act, 50% of the cost to acquire the asset may be deducted in the year in which the asset is brought into use, and 30% and 20% may be deducted in each of the two succeeding years, respectively.

Are wind farms taxed in Taiwan?

In Taiwan, wind farm operators usually set up a company to hold the wind farm assets. Taiwan companies are subject to corporate income tax on the income derived world-wide. If companies have generated taxable income over TWD 120,000 in a financial year, their total taxable income will be taxed at the rate of 20%.

Are wind turbines taxed in Norway?

As of 2017, the tonnage tax scheme has been extended to include wind turbine vessels that operate in the form of construction, repair, maintenance and dismantling of offshore wind turbines at sea, cf. the Income Tax Act section 8-11. There is no special tax regime for wind power production in Norway.

Are wind power companies taxed in Russia?

Russian-resident wind power companies are subject to general corporate income tax at 20% rate (3% paid to the Federal budget and 17% to the regional budget) on taxable profit. The taxable profit is calculated as income minus economically justified and properly documented expenses recorded in the tax accounts.