Investments due? It could be worth waiting!

Starting in 2024, the German government plans to promote climate-friendly business practices by introducing the so-called investment premium (Investitionsprämie) in the Climate Protection Investment Premium Act (Klimaschutz-Investitionsprämiengesetz - KlimaInvPG).

What is the investment premium?

The acquisition costs of certain assets are to be reimbursed to a not insignificant extent. The asset must be a new, movable and depreciable tangible asset with an acquisition cost of at least EUR 5,000 (current status of the government draft, 10/2023).

What is not eligible for an investment premium?

For used or immovable as well as intangible assets; furthermore, for investments for combined heat and power, district heating/cooling or energy units that are operated with fossil fuels.

Who is eligible for the premium?

Private individuals, partnerships or corporations that operate as farmers, foresters, professionals and self-employed persons and pay taxes in Germany and are therefore not exempt under either national or DTT regulations.

Eligibility period?

Presumably from January 1, 2024 to and including December 31, 2029.

Premium amount?

Up to 30 million. The government plans to reimburse 15% of acquisition costs, but makes a cap on it when the premium beneficiary has reached 200 million euros in investment volume.

Procedure?

The acquisition needs to increase the company's energy efficiency. Proof is provided in the form of a savings concept (Einsparkonzept), which must be prepared with the help of certified energy consultants; preparation by the company's own energy manager may be possible, provided the relevant state certifications are available. The investment premium must be applied for at the relevant tax office (maximum of four applications).

Status of legislation?

The German Bundestag intends to pass the law before the end of November. If the Bundesrat approves and the bill is passed this year, the premium can be introduced in 2024!