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Solar feeding into tax

Published on 01 Aug 11 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

Government subsidies provided to homeowners who install solar panels on the roofs of their homes may have an unexpected taxation outcome, namely, that the feed-in tariffs available can be assessable income.

In this article, the author examines a number of private rulings on this subject issued by the Australian Taxation Office which show a trend towards solar feed-in tariffs being assessable income. Other rulings have concluded that payments or credits (net feed-in tariff) for very small-scale installations that will cover only the emissions of the household are not assessable income. There may be other problems. The value of renewable energy certificates given to the installer may be an assessable recoupment. Capital gains tax and goods and services tax consequences may also ensue. On the other hand, if the feed-in tariff is assessable, the taxpayer may be able to claim deductions, but any depreciation may be limited by installation rebates.

Author profile:

Ken MANSELL
Ken is a Senior Manager with KPMG.
Current at July 2007
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