Eating both ways with your company pays off from a tax perspective

Everyone knows the hybrid car. Hopefully you benefit from the best of both worlds. The same applies to hybrid business operations. Banks encourage investments in sustainability. This does not mean radically changing your business operations, but taking advantage of the opportunities offered is financially attractive.

I have been driving a plug-in hybrid car for a year now. No choice for electric only, but for short distances a bit of electric driving on the power generated by my own solar panels. In addition, also petrol, to ensure that I can reach my destination without thinking. I benefit from lower fuel costs and some favorable tax arrangements. Consider lower motor vehicle tax and the netting scheme. In short: I use old and new techniques. Another factor in my choice is that our government's policy towards electric driving is not consistent in everything. By choosing hybrid, I spread my cards to take advantage of the possible advantages.

Radical change
As a farmer you are always faced with choices. Sometimes choices that come from within yourself, but often also due to policy choices from outside the company. In particular, the choice towards more sustainable entrepreneurship is at the top. When we think of sustainability, we may immediately think of major changes within your corporate structure and working methods. But you don't change too radically because it is demanded, but mainly because you support it yourself.

Banks also offer stimulating financing for investments in sustainability. This is facilitated by the national or European government, or is born from a bank's own vision. Incentive because it involves more favorable (read: cheaper) financing conditions. The benefits vary in an interest discount between 0,3% and 0,8%.

In order to qualify for such favorable conditions, the banks do impose conditions. These differ per bank and per type of financing. For example, the 'green discount' on interest only applies to organic companies with SKAL certification, based on a green declaration. Other certifications are required for other types of loans or credits on favorable terms. Examples of this are PlanetProof, Milieukeur or Beter Leven. Because, as mentioned, the benefits and conditions differ per bank, it is necessary to clearly understand your options and the associated benefits in advance.

Hybrid business operations
I call making your company more sustainable in parts 'hybrid business operations'. Just like I did with my choice of car. This gives access to multiple benefits associated with the different sustainability schemes. With the current interest rates, any interest discount is even better. In this way, sustainability becomes fun too. How do you think you can benefit from the best of both worlds?

Sjoerd de Beer

Sjoerd de Beer is an experienced business advisor at Farmers Funding & Advies. In more than 35 years of working with agricultural entrepreneurs, he has acquired knowledge and know-how in business, financial and fiscal areas.

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.