According to an amendment to the Hungarian Corporate Income Tax Act approved in July 2018, taxpayers may be eligible for higher tax allowance in connection with an investment project to comply with energy efficiency targets, upon placing the project into operation, in the tax year following the year when the project was placed into operation – or in the same tax year at the taxpayer’s discretion – and in the following five tax years.
The tax allowance claimed by the taxpayer for any investment project may be 30-45%, subject to the location of the investment project, and it may be increased by 20 percentage points for aid granted to small companies and by 10 percentage points for aid granted to medium-sized companies. However, the amount of the tax allowance may not exceed the forint equivalent of 15 million euros.
The tax allowance may be claimed on the condition that the taxpayer is in the possession of a certificate in the first tax year when claiming the tax allowance, evidencing that the project is recognized as an investment to comply with energy efficiency targets. The tax allowance may be available when the taxpayer starts to use all assets comprised in the investment project, and continues to operate and/or use such assets for at least five years after placing the project into operation.