On 13 December 2022, changes to the Law on Corporate Income Taxation (LCIT) were promulgated. The changes are related to the expiration of the implementation period of the state aid scheme in the form of tax relief and the creation of an opportunity to continue this aid under a new scheme.
The purpose of the state aid scheme is to promote investments for production activity in municipalities with unemployment at or above 25 percent higher than the national average, as well as to reduce unemployment in these municipalities by providing certain employment. In connection with this, according to the new rules in the LCIT, the tax relief, representing state aid for regional development in the form of a remitted tax, should be granted only for an initial investment project, with a scope for the period 2015 - 2021, to a taxable person, which is a micro-, small or medium-sized enterprise. In this way, the promotion of investments for production activity in municipalities with unemployment at or above 25 percent higher than the national average will continue, as well as the reduction of unemployment in these municipalities by ensuring certain employment. The scheme will apply to all regions of the country with the wider scope of initial investment. Also, the scheme, upon approval by the European Commission, will continue to be applied in a similar way to the aid scheme in force until 31 December 2021.
The tax preference is provided with the aim of promoting economic activity for micro, small or medium-sized enterprises, stimulating them to invest in tangible and intangible assets in enterprises located in municipalities with unemployment higher than the national average, expecting so as to maintain or increase employment levels in these municipalities.
The changes in the LCIT, on the other hand, amend the conditions regarding the general requirements for the assignment of corporate tax. It is expressly specified that public obligations and obligations under sanctions according to criminal decrees that have entered into force, related to the violation of the normative acts regarding public obligations, as well as the corresponding interest related to their non-payment, as of 31 December of the relevant year, are not subject to enforcement and the same ones shall not be reflected in the tax-insurance account or are not reflected as submitted for enforcement before the National Revenue Agency. This change will make it easier for taxpayers and reduce the scope of litigation.
The changes in the LCIT further regulate the order and manner of implementation of Chapter III of Council Regulation (EU) 2022/1854 of 6 October 2022 on emergency intervention to address high energy prices. The rules for the temporary solidarity contribution to be paid by the companies and the places of economic activity from the Union operating in the crude oil, natural gas, coal and oil refining industries for the excess profits generated by them are defined.