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Madaster and Van Draeckeburgh enthusiastic about fiscal measure Environmental Investments Deduction 2020

Authors: Mitchell Gmelich (Director Van Draeckeburgh), Rob Oomen (Partnership Manager Madaster) 

As Madaster’s partnership manager, partners and customers increasingly ask me about the existing fiscal measures for circular construction activities and the role of material passports. High time to have an in-depth conversation on the subject with Mitchell Gmelich of Van Draeckeburgh, the consultancy on subsidies for the built environment and partner of Madaster, answering 5 questions about the opportunities of the MIA. 

What does MIA stand for? 

MIA is a Dutch fiscal scheme for ‘environmental investment rebates’ related to investments in environmentally friendly corporate resources and sustainable buildings. This also applies to circular buildings that comply with a stringent environmental performance ambition and that have been provided with a material passport.  

Which objects are eligible for the MIA?

The MIA is a broad scheme, which means that it applies to many environmentally friendly investments. Obvious objects are circular houses, utilities and industrial buildings, as those are eligible for substantial tax benefits under this measure. This also includes circular materials and products used within these objects, such as sustainably produced timber and circular facing constructions. A special environment list has been compiled that states exactly what corporate resources or techniques would be eligible. 

What is the maximum investment deduction for circular buildings? 

This differs per object: for circular utilities and housing, no less than 36% of the invested amount can be deducted from the corporate income tax. For industrial objects, the MIA deduction is 27%. This results in a net tax benefit of 6% to 9% of investment costs.

How to file a MIA application?
Each application needs to comply with a series of preconditions in order to be eligible for deductions under the MIA. Here, I will name the most important ones: an MPG calculation (on environmental performance of a building) must demonstrate whether the building is in compliance with the circular standards. In addition, such a calculation must be assessed using a certification system such as GPR Gebouw or BREEAM-NL. 

In addition, any circular construction requires a complete material passport in order to be eligible. This contains 'the ingredients' of a building; all elements and components, the toxicity of materials and the building’s ability to be dismantled.

An example of such a calculation:

MIA is a fiscal scheme under which investment deductions can be applied for by organisations paying corporate tax. These are companies and real estate investors, as well as housing corporations. Below an example of the potential benefit for a building project of 2,500 m2 gross floor area (GFA). The maximum investment amount for a circular building that qualifies is EUR 1,200 per m2 GFA*.      

*For utilities and housing, the maximum investment deduction is € 1,200 per m2 GFA. For industrial buildings, this is € 600 and € 900 per m2 for buildings with and without green roofs, respectively. 

As Mitchell's answers and the example calculation show, it can be financially interesting to talk to Van Draeckeburgh and explore the possibilities. As subsidy specialists, they know exactly how a material passport can be cleverly used to create maximum financial scope for circular construction. And that brings us closer to a world without waste.   

Left: Mitchell Gmelich, Director Van Draeckeburgh
Right: Rob Oomen, Partner Manager Madaster