Leyton is an international consulting firm that helps businesses leverage financial incentives to accelerate their growth and achieve long-lasting performance.
Canada is taking bold steps towards a cleaner, more sustainable future with its proposed Clean Hydrogen Tax Credit. This innovative initiative is set to revolutionize the way we produce and utilize hydrogen, a crucial element in the quest for carbon-neutral energy solutions. Let’s delve into what this tax credit entails and how it can shape the landscape of clean energy investments in Canada.
What is the Clean Hydrogen Tax Incentive?
The Clean Hydrogen Tax Credit is designed to incentivize capital investment in the production of clean hydrogen and clean ammonia within Canada. This forward-thinking measure aims to accelerate the transition to a low-carbon economy by providing tax incentives to qualifying taxpayers who invest in eligible clean hydrogen property. Various equipment used in the production of hydrogen through electrolysis of water or natural gas reforming, clean ammonia equipment, dual-use electricity and heat equipment, and more, qualify for the tax credit. The tax credit rate varies based on factors such as the carbon intensity of the production process, the year of property acquisition, and meeting certain labor requirements.
Why should you apply?
This tax credit encourages innovation in clean hydrogen technologies, fostering the development of efficient and sustainable production methods. Clean hydrogen production offers a pathway to significantly reduce carbon emissions, contributing to global efforts to combat climate change. Businesses applying to this tax credit and investing in clean hydrogen gain a competitive edge in an evolving market, boost their cashflow, and position themselves as leaders in sustainability.
How to apply?
This tax credit is refundable and available to qualifying taxpayers who invest in eligible clean hydrogen property between March 28, 2023, and 2035. Understanding the intricacies of this tax credit is crucial for optimizing your chances of obtaining it. Interested applicants must adhere to specific guidelines regarding eligible equipment, labor requirements, and compliance obligations to fully leverage the tax credit.
If you are hoping to claim this tax credit, at Leyton, our experts can help you develop a compelling application without disrupting your day-to-day activities. Schedule a free consultation with one of our consultants now to find out if you qualify.
