Hannes Snellman’s Post

Finland to give incentives to invest in green industry projects - here is a summary by my tax colleagues Ossi Haapaniemi, Eero Männistö and Andreas Bussman: The Finnish Government published Tuesday 16 April 2024 its General Government Fiscal Plan for 2025-2028. According to the plan, there will be a new fixed-term tax incentive for green industrial investments. The incentive is intended to support investments in green industry projects, such as battery, hydrogen and fossil-free steel industry investments.   The exact details of the incentive are still unknown, but tentatively the following has been informed to the public:   the amount of the incentive will be 20 % of the total value of the investment, however, no more than EUR 150 million per project, the incentive is to be granted to new investments which are decided upon by 31 December 2025, technically the incentive would be granted by deducting part of the investment costs from the payable company income tax in the future, meaning that the incentive is only intended to profitable investment projects, after the project is ready, the tax incentive can be obtained earliest starting from year 2028, there will be further investigations to determine how the maximum amount per project will be calculated and what will be the time frame, in which the incentive is usable.   We at Roschier are closely monitoring the process. We are of course happy to discuss what possible effects the proposed incentive could have on contemplated investments and their tax position in Finland.  

On 16 April 2024, the Finnish Government introduced its General Government Fiscal Plan for the period 2025-2028. As part of its growth package, the Government is planning to introduce a temporary tax credit for large-scale industrial investments that support the transition to a net zero economy, for example, investments in battery storage and hydrogen projects and fossil-fuel free steel industry. The incentive has been enabled by the EU’s Temporary Crisis and Transition Framework which is designed to support the economy in the context of Russia’s war against Ukraine and to speed up investment and financing for clean tech production in Europe. The proposal is that the tax credit would equal 20% of the total investment amount, up to a maximum of EUR 150 million per project. The tax credit would be granted only for new investment projects upon which a final investment decision has been made by the end of 2025. Under the tax credit scheme, a company could deduct a portion of its investment costs from its future corporate tax liability, meaning the tax credit would only benefit successful projects. The tax credit could be applied against the corporate tax payable at the earliest from 2028 onwards, once the project is completed. More detailed requirements for obtaining the tax credit, such as the definition of new green investment, final investment decision and the period during which the credit must be used, will only become clear once the Ministry of Finance starts its legislative preparation. HPP will provide updates as the legislative process progresses and clearer details of the final scheme are clarified. In the meantime, HPP’s Tax team would be happy to answer any questions regarding the planned tax credit or any other Finnish tax matters. #taxmatters #taxlaw #news #hppattorneys #hppasianajotoimisto

Nigeria Aims to Revitalize Natural Gas Sector with New Tax Incentives Insights: 1. New Policy Framework: • Nigeria is advancing a new policy framework designed to rejuvenate its natural gas sector, with the goal of attracting up to $10 billion in investments. • The proposed measures include a series of tax incentives aimed at enticing both local and international investors to explore the country’s deep-water gas resources. 2. Government Approval Process: • The framework has been approved by the Federal Executive Council and is now awaiting ratification by the National Assembly. • Once enacted, the policy is expected to expedite the development of Nigeria’s natural gas infrastructure, enhancing exploration and production capabilities. 3. Transition to Natural Gas: • The government’s initiative is part of a broader strategy to transition away from heavy reliance on fossil fuels for transportation, thereby boosting energy security and reducing dependence on imported fuels. • By focusing on natural gas, Nigeria aims to position itself as a key player in the global energy market while promoting cleaner energy alternatives. 4. Economic and Environmental Goals: • The introduction of tax breaks and incentives is intended to stimulate growth in the gas sector, create jobs, attract foreign investment, and lower the nation’s carbon footprint. • This strategic push toward natural gas aligns with global trends emphasizing cleaner energy sources, making Nigeria’s focus timely and relevant. 5. Potential Impact on the Energy Landscape: • Successful implementation of this policy could significantly transform Nigeria’s energy landscape, establishing the country as a leader in Africa’s burgeoning gas industry. • Investors and industry stakeholders are closely monitoring the situation to assess how quickly the new laws will be enacted and their effectiveness in driving change. In summary, Nigeria’s initiative to implement tax incentives for its natural gas sector reflects a strategic effort to attract investment, enhance energy security, and promote cleaner energy practices. The anticipated changes could position Nigeria as a key player in Africa’s gas industry, with significant implications for its economic and environmental future.

Public Acceptance of Carbon Tax Implementation: A Nationwide Empirical Study in Malaysia https://lnkd.in/gTAhJGyB ABSTRACT This study investigates public personal traits and demographic factors influencing their acceptance of the implementation of carbon tax policy in Malaysia. Understanding the public’s acceptance behaviour becomes crucial as carbon tax gains attention in developing countries. Through an online survey of 566 respondents, the research employs multiple regression analysis, t-test and one-way analysis of variance to examine the relationships. The results indicate that the carbon tax policy receives positive support from the public, who perceive carbon tax as an effective policy to reduce carbon emissions, those willing to pay more to protect the environment, those who recognise climate change as a serious issue and the Chinese community. These findings fill a gap in the environmental taxation literature for developing countries, offering insights for the Malaysian government to formulate effective strategies for public support. It is imperative for the government to consistently disseminate information to the public and create awareness through mass media regarding the serious issue of climate change and the effectiveness of a carbon tax to mitigate it. Regardless of the political party in power, adopting a carbon tax should be prioritised as a national agenda to maintain the country’s economic, social, and environmental sustainability to demonstrate the government’s unwavering commitment. Keywords carbon tax; developing countries; environmental tax; Malaysia; Public acceptance

UN Tax Committee Proposes New Article for Income from Certain Natural Resources in UN Model On 19-22 March 2024, the United Nations Committee of Experts on International Cooperation in Tax Matters (UN Tax Committee) released a working paper titled “The Treatment of Income Arising from Extractives and Other Natural Resources” (E/C.18/2024/CRP.14). In this document, discussed during its 28th session, the UN Tax Committee proposes to introduce a new Article 5A and related Commentary into the UN Model Tax Convention (UN Model) concerning taxation of income from certain natural resource activities. The proposal builds upon the work of both the Subcommittees on Extractive Industries and the UN Model Double Taxation Convention. It follows a working paper (E/C.18/2023/CRP.38) submitted for discussion at the 27th session of the UN Tax Committee. The introduction of the new Article 5A in the UN Model, expected in 2025, will mark a significant shift, broadening the taxing rights of the state in which natural resources are located. Notably, the new article provides that, notwithstanding the provisions of Articles 5, 8, and 14 of the UN Tax Convention relating to the existence of a permanent establishment (PE) or fixed base, a resident of a Contracting State carrying on activities in the other Contracting State concerning the exploration or exploitation of natural resources in that other State is deemed to have a PE or a fixed base therein. In practical terms, Article 5A provides specific nexus tests for income from certain natural resource activities, effectively superseding the ordinary PE and fixed base provisions. More in detail, the proposal stipulates that natural resource activities can be taxed by the source state if they are carried out for a period or periods not exceeding 30 days in the aggregate in any 12 months commencing or ending in the fiscal year concerned.   The new article also includes an anti-avoidance provision in paragraph 3, which prevents the artificial splitting of activities between related parties. Paragraph 4 lays down the scope of the provision. It clarifies that the term “natural resources” means resources such as fish, hydrocarbons, minerals, pearls, solar power, wind power, hydropower, geothermal power, and similar sources of renewable energy. The term “exploration for, or exploitation of natural resources” instead relates to activities carried on in connection with (i) the exploration or exploitation of the natural resources, (ii) the decommissioning and abandonment of facilities used in connection with the above activities, and (iii) the restoration and rehabilitation of the land or other site used in connection with the above activities. #UN #NaturalResources Stay ahead in the tax landscape with our Newsletter: https://lnkd.in/ggkgvAfb. Get the latest GCC tax updates directly to your inbox!

Netherlands’ Tax Strategy for Sustainable Development in 2025

Germany’s Tax Policy for Green Innovation in 2025

Thailand to revise battery tax structure and introduce carbon tax The Ministry of Finance of Thailand is considering key green tax reforms, including changes to the battery tax structure and the introduction of a carbon tax, aimed at promoting environmental sustainability while maintaining economic stability. These initiatives are part of broader efforts to incentivize cleaner production and hold polluters accountable without passing costs onto consumers.

Via PV Mag: " Bill aims to cut 45X tax credits for Chinese solar makers: While the lucrative tax credits has attracted clean energy manufacturers from around the world to build factories in the U.S., the fact that many of the new manufacturing facilities are from Chinese companies has created a controversy that this new bill aims to solve. A bipartisan group of U.S. lawmakers introduced the American Tax Dollars for American Solar Manufacturing Act, aiming to prevent Chinese solar module manufacturers from claiming subsidies for their American factories. The Inflation Reduction Act, passed in 2022, offers manufacturing 45 X tax credits for solar components made in America. While the lucrative tax credits have been attracting clean energy manufacturers worldwide to build factories in the U.S., the fact that some of the new manufacturing facilities are from Chinese companies has created a controversy that this new bill aims to solve. The bill was introduced by Senators Sherrod Brown (D-Ohio), Bill Cassidy (D-LA), Jon Ossoff (D-GA) and Rick Scott (D-FL), seeks to protect U.S. solar manufacturing by removing the tax incentives for Chinese companies and from other “foreign entities of interest” would not be able to receive the 45X tax credits. “By reshoring the solar supply chain, we can bolster solar manufacturing in the U.S. and ensure our country is not dependent on China for a technology that was invented here and accounted for half of our new grid energy additions last year, said Mike Carr, Executive Director of the Solar Energy Manufacturers for America (SEMA) Coalition. The Defend Solar USA Alliance also supports the new legislation. The Alliance said in a release that while the 45X tax credit has contributed to the largest investments in factory production in nearly 100 years, it’s estimated that Chinese-controlled companies could collect more than $100 billion in federal tax credits. These credits, the Alliance contends, were “designed to support U.S. clean-energy manufacturers”. “We shouldn’t be in the business of rewarding China at the expense of our domestic solar industry,” said U.S. Army General John Adams (ret.), and Board Member of the Defend Solar USA Alliance. “The bipartisan bill would ensure that Americans’ taxpayer dollars stay right here at home rather than help subsidize a foreign government’s efforts to put domestic manufacturers out of work. By building a successful domestic solar industry, the U.S. can break from its reliance on foreign energy sources, strengthen our supply chain and reduce our vulnerability to geopolitical conflicts.” " #EnergyStrorage #BatteryStorage #Energy

Swedish Tax Agency's interpretation of the green tax credit slows down the #solar battery market in #Sweden, according to Svensk Solenergi