Tax incentives for hydrogen projects (Decree 895 2022)

The National Government issued Decree 895 of 2022 through which it allows developers of zero- and low-emission hydrogen projects in the country, as well as initiatives that promote the efficient use of energy, to access tax benefits. Some of the tax incentives that are included in the decree are the over-deduction of up to 50% in income tax from the total investment made over 15 years and the accelerated depreciation of assets in three years. The standard also allows developers of renewable energy projects (now including hydrogen), to exclude VAT and the payment of tariffs on domestic or imported equipment, elements, machinery and services that are intended for the production and use of renewable energy or energy efficient management initiatives
The decree also designates UPME (Planning unit for the energy and mining sector) as entity to set up the certification scheme to be able to grant the incentives associated to the decree

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