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The finances of eco benefits

Tax credits, TVA (VAT) and interest-free loans can all help cut the cost

NO MATTER what you spend your money on, everyone wants to make the most of their finances. Tax credits, TVA (VAT) and interest-free loans can all help cut the cost of your investment and even get money back from the government, particularly as far as renewables are concerned.

In general, you get a benefit for spending on environmentally friendly and efficient products. How do they work?

TVA

This is the French equivalent of VAT and is either 19.6 per cent (ouch) or 5.5 per cent. Invoices and quotes will generally give a price “HT” without VAT, and then the “ttc” price, which includes TVA. It should show the TVA rate applied: 5.5 or 19.6 per cent.

New builds and renovations are excluded from the 5.5 per cent rate and in this case renovation means, for example, a barn conversion or changing a building not previously
used as habitation.

Most suppliers ask you to sign a Taxe sur la valeur ajoutée/Attestation simplifiée, which is a “checklist” to show that your project qualifies for 5.5 per cent TVA. If the
wrong rate has been used, the tax office can bill you (not the supplier) for the difference; plus a possible fine.

The same company must supply and install the product and be TVA-registered, so this is not applicable for DIY projects. Professional suppliers can advise on the rules and how you can make the system work for you, within the bounds of the law.

Le crédit d’impôt développement durable /Tax credit for sustainable development.

You do not have to be a taxpayer in France to get these tax credits, but you must be principally resident in France. The credit – and percentage rebate – applies to many different products. Rebates are made for the “ttc” product cost, but not for labour/installation. The products include solar thermal (45 per cent rebate), solar photovoltaic (22 per cent), heat pumps, wood burners, insulation etc. As with reduced TVA rates, the same company has to both supply and install to qualify.

A solar thermal system can cost €6,000 ttc; fitting is €1,000 ttc, making €7,000 ttc total. You get 45 per cent of the €6,000 back (€2,700), so the final price is €4,300.
If you also paid TVA at 5.5 per cent, the savings are substantial, although the percentage rebate is likely to fall year on year.

The Eco Prêt

This is an interest-free loan for money spent on qualifying products and is available from most banks. Same general rules as above, but one key point often missed is that you need two types of accepted products to qualify: e.g, insulation plus solar. There are quite a few other rules and regulations relating to the above, so you must check with your supplier to be sure.

This column is written by Marc Asker, head of EcoPower, a renewable energies company that he set up in 2007. He has been in the industry since 2003

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