Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

A business may claim capital allowances on capital expenditure it incurs on certain types of business assets. Section 284 of the Taxes Consolidation Act 1997 provides for capital allowances for wear and tear of plant and machinery to be taken as a deduction for tax purposes. In general, such capital allowances are claimed at a rate of 12.5% annually, over eight years.

Data centres are treated in the same manner as any other business. They may claim capital allowances on expenditure incurred on qualifying plant and machinery, where it is acquired and used for the purposes of the trade. There is no special scheme applicable and, for that reason, I am advised by Revenue that capital allowance claims for data centres are not separately identifiable on Revenue records. Furthermore, while the plant and machinery in data centres may qualify for capital allowances, I am also advised by Revenue that a building which houses a data centre is not an industrial building within the meaning of section 268 of the Taxes Consolidation Act 1997 and therefore the building itself does not qualify for industrial building capital allowances.

With regard to the accelerated capital allowance, ACA, scheme for energy efficient equipment, this allows taxpayers to deduct the full cost of expenditure on eligible equipment from taxable profits in the year of purchase, in place of the normal eight-year timeframe, where they invest in highly energy-efficient equipment. The developments described by the Deputies are not automatically entitled to accelerated capital allowances in their own right. However, where they purchase equipment included on the Sustainable Energy Authority of Ireland's, SEAI's, energy efficient equipment register, they are entitled to claim accelerated capital allowances on that particular piece of equipment, just as any other Irish company or sole trader is so entitled.

As the treatment of capital allowances with respect to capital expenditure incurred by data centres is the standard treatment applicable to all businesses, I do not believe a report is warranted. The data on the issue raised by the Deputies is not available to me. Similarly, as the accelerated capital allowance scheme for energy-efficient equipment was only reviewed last year, I do not believe we should do a further review of the scheme at this point.