The draft Climate Protection Investment Premium Act (Klimaschutz-Investitionsprämiengesetz, Klimaschutz-InvPG) provides for the introduction of a premium for investments in climate-friendly technologies and operational measures. This act – part of the so-called Growth Opportunities Act (Wachstumschancengesetz) – is intended to apply to taxpayers with income from agriculture and forestry, business operations, and self-employed work.
The entitlement to the benefit is to apply only if the income is also taxable in Germany, meaning in particular that it is not exempted under a double taxation treaty. The investment premium is to be limited in time to a funding period for projects undertaken before 01/01/2030. To qualify for the funding, it must be demonstrated that the investment improves the energy efficiency of the business. This requirement must be evidenced by a savings concept. Investments in movable fixed assets (e.g., machinery) are eligible for funding.
A minimum investment of EUR 5,000 in acquisition or production costs per asset applies, with total investments in qualifying assets amounting to at least EUR 10,000. Up to four applications may be filed per eligible applicant, specifically between 31/12/2024 and 01/01/2032.
The assessment base for the Climate Protection Investment Premium is to be determined by the sum of the eligible expenditures, but is capped at a total of EUR 200 million during the funding period. The investment premium is to amount to 15% of the assessment base, and therefore no more than EUR 30 million. If additional state aid is granted through other funding programs (e.g., from the KfW), the sum of the investment premium and other subsidies may not exceed EUR 30 million per company and investment project.
The premium is granted upon application. The application must be submitted electronically to the competent tax office. The premium is not taxed as income; however, the depreciation of the investment asset is to be reduced by the amount of the investment premium.