Government of Canada introducing immediate expensing for clean energy investments
Government of Canada introducing immediate expensing for clean energy investments From the Government of Canada website: “To increase investment in the clean technology sector, the Government proposes that specified clean energy equipment be eligible for immediate expensing. With this change, the cost of specified clean energy equipment will be eligible for a full tax write-off the year it is put in use in the business. This change will encourage investments that create jobs for the middle class, help Canada in achieving its climate goals, and position Canada to be globally competitive. Immediate expensing will apply to qualifying assets acquired after November 20, 2018. It will be gradually phased out starting in 2024, and will no longer be in effect for investments put in use after 2027.” Simply put, clean energy investments will be eligible for a full tax write off for the fiscal year in which it is commissioned, allowing businesses to reduce their taxable income and thus tax liability. Immediate expensing will apply to investments in solar panels, wind turbines, electric vehicle charging stations, battery storage, and other clean energy technologies. Previously only 25% of investments could be expensed in the first year.