The Energy Investment Allowance (EIA) lets businesses deduct a significant portion of energy-saving investment costs from their taxable profits. It is available in several European jurisdictions, including the Netherlands (energie-investeringsaftrek).
The EIA works on top of standard depreciation. If you buy energy-efficient equipment, you can deduct both the normal depreciation and an additional percentage of the investment cost from your taxable profit.
How It Works
As of 2026, businesses can typically deduct around 40% to 45% of qualifying investment costs from taxable profit. Combined with standard corporate tax rates, this results in an effective discount of approximately 10% to 12% on the purchase price of equipment.
Qualifying Investments
Not every green purchase qualifies. Investments must appear on an official Energy List and meet specific technical criteria. Common qualifying items include:
- High-efficiency LED lighting systems
- Heat pumps and geothermal energy recovery units
- Industrial insulation for cooling or heating systems
- CO2 reduction technologies
Cash Flow Impact
The EIA reduces your tax bill in the year the investment is made. This frees up capital that can be reinvested in further improvements. Combined with lower energy bills, the total return on investment is often significantly better than the headline deduction rate suggests.
Application Process
The EIA requires you to notify the tax authorities within a strict deadline — typically within three months after committing to the investment. Missing this deadline means losing the deduction entirely. The technology must also be operational and integrated into your business operations, not just purchased on paper.
This deadline requirement is one of the most common reasons businesses miss out on the benefit. Working with a tax advisor who tracks investment timelines helps avoid this problem.
Energy Price Protection
Beyond the tax deduction, energy-efficient investments reduce exposure to volatile energy prices. Companies that invest in self-generation or high-efficiency equipment lower their ongoing energy costs, which provides a form of protection against future price increases.
Calculating Total ROI
- Tax deduction: The 40%+ deduction from taxable profit.
- Energy savings: Reduced monthly energy costs over the equipment’s lifetime.
- Asset value: Modernized facilities often have higher property values.
Who Benefits Most
The EIA tends to favor larger companies with the resources to plan and execute energy investments. Smaller businesses often miss out because they are less aware of the program or lack the capital to make qualifying investments upfront. If you run a small or medium business and are planning equipment upgrades, it is worth checking whether your purchases qualify.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws change frequently, and individual circumstances vary. Always consult a qualified tax advisor before making financial decisions.