Tax deduction – Luxembourg and Sweden
Tax incentives can be used to steer investment in energy-efficiency measures. The reduction of VAT or tax deductions on renovation activities, mainly on labour costs, has often created win-win-situations for the environment, economic growth, and created/assured workplaces.
Description
Luxembourg has introduced a reduced tax of 3 per cent on all construction and renovation of housing, provided the property is intended as a main residence.[1] The total amount of the VAT benefit cannot exceed EUR 50,000 per built and/or renovated residence. In Sweden, the system is called “ROT-avdrag” (repairs, conversion, and extension – deduction)[2]. Repair, maintenance, conversions and extensions are counted as ROT work, and are tax deductible up to 50,000 Swedish croons (approximately EUR 5,000) per person per household per year.
Scale
National
More information
[1] Guichet.lu, “Applying for VAT rebate or direct application of the super-reduced tax rate”. Available at https://guichet.public.lu/en/citoyens/logement/construction/aides-indirectes/remboursement-tva-taux-reduit.html (accessed on 10 October2020).
[2] Skatteverket, “ROT and RUT work”. Available at https://www.skatteverket.se/servicelankar/otherlanguages/inenglish/businessesandemployers/declaringtaxesbusinesses/rotandrutwork.4.8dcbbe4142d38302d793f.html (accessed on 10 October 2020).
An initiative of:
