Small and Medium Enterprises: Extra tax bonus for green, digital and energy investments

Extra tax bonuses will be available for small and medium-sized enterprises that make green, digital and energy investments. Specifically, the expenses they incur in the green economy, energy and digitalization, will be deducted from their gross income increased by 100%, as a result of which their tax burden will be reduced.

Thus, after the “cut” of 30% in income tax for 9 years provided for small and medium enterprises that will merge and grow, comes a new regulation of the Ministry of Finance providing generous cost reductions for the years 2023, 2024 and 2025.

A provision contained in the bill for the reform of the institutional framework of the Financial Stability Fund stipulates that the expenses related to green economy, energy and digitization are deducted from the gross income of small and medium enterprises, at the time of their realization, increased by 100%.

100% of small and medium-sized enterprises active in the sectors of primary agricultural production, fisheries and aquaculture are excluded from the extra discount of 100% of the costs.

Small and medium-sized enterprises are those which meet the requirements of the Annex to Commission Recommendation 2003/361 / EC of 6 May 2003.

Depreciation

The tax bonus is also applied to the depreciation expense of the assets of the small and medium enterprises acquired in order to strengthen the green economy, energy and digitization, if the enterprise does not apply an increased deduction of the depreciation expense in accordance with article 24 and approx. ‘and e’ of Article 22B.

In case of sale of the fixed asset for which the incentive of the increased deduction of the depreciation expense was applied, this incentive ceases to be provided, but without removing the already granted increased discount.

The over-discount applies only to specific costs of goods or services incurred by receiving an electronic invoice, from companies with specific NIC activity codes or codes according to the Nice Classification (NCL) system for foreign companies.

The aid is granted in accordance with the rules of state aid, as specified in the decision of the next subparagraph and relates to expenditure incurred and fixed assets acquired in the tax years 2023, 2024 and 2025

The provision also stipulates that by a joint decision of the Ministers of Finance, Environment and Energy and Digital Governance, following a proposal by the Governor of the Independent Public Revenue Authority (A.A.D.E.), the EU legal basis for granting the aid is determined, the specialization of these costs in the form of Activity Code Numbers of the companies that supply the goods or the services, the types of these costs, the compatibility conditions in terms of state aid, the procedures of granting and control and any other necessary details for the application of this provision.

This decision may be updated annually as regards the types of expenditure and any necessary details.