Finland seeking views on radical tax cut for offshore wind
Finland has opened a consultation on plans to radically reduce the amount of taxes imposed on offshore wind projects.
The country's Ministry of Finance proposes to reform the sector so that the taxation of offshore wind power in the Finnish economic zone (EEZ) is equivalent to its taxation in territorial waters.
It will also help bring it in line with onshore wind farms which currently benefit from significantly lower taxes.
Jordan May, senior analyst for the Nordic region and British Isles at TGS 4C Offshore said: "The law on taxation of offshore wind has been sent for consultation.
"One form of taxation in Finland is done against the property value (‘replacement value’), which is currently set at 75pc for onshore wind.
"Offshore wind has a significantly higher cost per MW than onshore wind and therefore is taxed at higher rates."
Earlier this year, Tahkoluoto Offshore Oy, the developer of the Tahkoluoto offshore wind farm extension project, scrapped plans for a demonstration project that involved the installation of two 15MW wind turbines because of the level of taxation and time restrictions.
The demo was rolled into the main project instead which remains in development.
"The proposal would set the replacement value at 35pc of construction costs, which would cut taxes in half," Jordan added.
"The tax per MWh is still expected to be slightly higher than for onshore wind.
"Additionally, taxation in the EEZ, specifically the share received by the municipalities, is covered.
"Municipalities getting a share is thought to increase community acceptance and is being implemented in Sweden for this reason.
"This law, once passed, will apply to all offshore wind farms entering construction in or after 2025."
The consultation will run until August 19, after which legislative amendments are scheduled to be applied in stages from early 2026.
First, please LoginComment After ~