Sweden taxes and incentives for renewable energy KPMG Global Energy & Natural Resources.
Swedish tax law allows taxpayers to depreciate windmills for corporate income tax purposes at a rate that is much faster than the actual rate of economic loss. The maximum depreciation allowance is 30 percent of the aggregate book value at the beginning of the tax year, plus the building or acquisition costs that have been made during the year.
If a straight-line depreciation of 20 percent per annum results in a lower aggregate book value in any year, the annual depreciation allowance may be increased correspondingly. The depreciation allowance is calculated on a pool basis, with the book value of all the taxpayer’s assets taken into account in order to calculate the maximum depreciation allowance.
For each MWh produced by renewable sources (solar, geothermal, wind, wave, bio fuels or hydro) the producer receives one certificate. (Some limitations exist for hydro power generation). A distributor is obliged to buy certificates up to a certain percentage of the power distributed. In this way a market is established for selling and buying certificates.
To support the transition to more sustainable energy sources for heating and transportation, no taxes are levied on renewable fuels while energy taxes, CO2 taxes and sulfur taxes are levied on fossil fuels.
There is also a fee-based system for the reduction of greenhouse gas emissions.