United States

2017 Green Tax Index

Oct 02, 2017
From the KPMG TaxWatch

KPMG created the Green Tax Index to increase awareness of the green tax landscape worldwide and encourage companies to explore the opportunities of green tax incentives and reduce their exposure to green tax penalties. The Index is organized by country, providing various indices, as well as a summary of various incentives or penalties in effect, organized by the following nine policy areas:

• Carbon and climate change
• Renewable energy and fuels
• Green vehicles
• Green buildings
• Water
• Material resources and waste
• Pollution and ecosystems
• Innovation
• Food

 

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Explore Green Tax Incentives Around the World

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40% of Brazil’s primary energy supply comes from renewable energy sources. Brazil has announced a goal of 45% by 2030.

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Switzerland’s “Building Program” incentivizes renovation of homes that aim to increase insulation around windows, walls, roofs, and floors. 

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Canada has no national green building incentive programs as of 2016. However, regional programs have been put in place, such as the City of Hamilton’s provision of a tax break of up to 75% of the property tax expected to accrue on a new green building.

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The United States offers accelerated depreciation periods of five years for renewable energy property, including solar and wind energy generating equipment and biomass equipment. If placed in service prior to 2020, this property is also eligible for an accelerated first-year depreciation deduction.

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The Polish parliament is drafting a law that aims to prevent local retailers from discarding unsold food that is still fit for consumption. Under it, owners of certain retail outlets will be required to donate such food to charity organizations, with intentional discards punishable by financial penalties.

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The Ministry of Finance in Vietnam has established an environment protection tax on nylon bags and an environment protection fee for water waste.

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Entrepreneurs or small companies that provide at least 10 percent of electricity from renewable energy equipment into the national grid are eligible for deduction of Germany’s input tax. The VAT for the purchase of the equipment will also be refunded by the tax authority.

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In the United Kingdom, companies supplying waste electrical and electronic equipment are obligated to demonstrate that material is reused and recycled and that waste batteries have been disposed of correctly by buying evidence notes. These regulations are led by European Directives and may also change following Brexit.

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Some local governments in Japan have introduced an industrial waste tax aimed to reduce industrial waste and improve waste recycling. 

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India offers a 100% deduction for revenue and capital expenditures on scientific research that relates to a company's business. 

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Currently, Finland is one of the world’s leading users of renewable sources of energy, especially bioenergy. Renewable energy sources provide one-fourth of Finland’s total energy consumption and account for more than one-fourth of its power generation.

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In Spain, green building incentives are regulated by government and also regionally. New building codes in Spain are mandating solar hot water for new and remodeled private residences, and photovoltaics to offset power requirements for all new and remodeled commercial buildings.

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An “environmental stamp” tax is payable to the EFA at the time a vehicle is registered for the first time to circulate in Romania. The value of the “green stamp” is calculated taking into account the CO2 emissions (g/km), engine cylindrical capacity (ccm), and pollution norm of the vehicle.

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In the Ukraine, regarding collection of water, a rent payment is charged, the rate of which varies depending on the river basin, region, and the type of business activity.

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In South Africa, plastic bags levy is imposed on certain types of plastic carriers and flat bags in the form of an environmental levy on these bags for payment by manufacturing facilities. There are no direct financial incentives for efficient use of material resources.

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To reach its goal of having 23% of renewable energies in its total consumption by 2020, France has instituted various incentives available specifically to renewable energy. An example includes the Tax Credit for Energy Transition, which provides a 30% credit on the amount of expenditures on equipment or renovation work for improving the energy performance of buildings.