As a result of the corona pandemic, the investment deduction for SME companies was temporarily increased from 8% to 25% for investments made during a well-defined period. In addition, there are still a number of special rates that are currently lower than the 25% rate and an investment deduction has been introduced for investments in a new category of assets.
Below you can find an overview.
Standard rate for SME
As stated above, the standard rate for SME companies has been increased from 8% to 25% for qualifying investments made from 12 March 2020 to 31 December 2022.
Special rates for SME
Further the following rates apply to SME companies:
Since the standard rate is currently 25%, this higher rate can be applied.
Attention: if there are less than 20 employees, a spread deduction can be opted for in the case of energy-saving investments and investments in research and development. This amounts to 20,5% of the depreciation on the investment. Furthermore, for investments in research and development, it is also possible to opt for the (one-off or spread) tax credit. This is then the nominal corporate tax rate applied on the same calculation basis as the investment deduction.
This must then be weighed against the application of the increased investment deduction of 25%.
Further note that for energy-saving investments and investments in research and development, an attestation must be requested.
Finally, an investment deduction of 3% applies to investments in reusable packaging, but no increase to 25% is foreseen.
Special rates for LARGE companies
Large companies can still benefit from the following investment deductions without the increase to 25%:
The remarks on spread deduction, tax credit and request of attestations also apply.
New investment deduction for ’green’ trucks
For investments in green trucks a new temporary investment deduction has been introduced. The purchase of new carbon emission free trucks, the installation of refuelling infrastructure for blue, green or turquoise hydrogen and the installation of electric charging infrastructure for carbon emission free trucks can count on a 35% investment deduction for investments made in 2022. However, the total investment deduction may not exceed EUR 60.000.000,00.
A green truck is then a truck, trailer or semi-trailer of category N1, N2 or N3.
For investments in the following years, the rates are as follows:
Further conditions are that the company:
Carry forward of the investment deduction
Investment deduction that cannot be used in a taxable period due to insufficient taxable base, can be transferred to the next taxable periods without limitation.
Exception to this is the increased investment deduction of 25%. This can only be transferred to the two following taxable periods for investments done until December 31, 2021 and to one following taxable period for investments done in the calendar year 2022.
Furthermore, it should be kept in mind that the deduction of the carried forward investment deduction together with the dividend deduction that can be carried forward unlimited in time, the transferred deduction for innovation income, the tax losses that can be carried forward unlimited in time and the notional interest deduction of the year is limited to EUR 1.000.000 + 70% of the difference between the balance that remains after the investment deduction and EUR 1.000.000.
The increased investment deduction of 25% for SMEs is certainly a good thing, but it should be weighed against the ordinary investment deductions that are provided for in view of the carry forward. The new, albeit temporary, investment deduction for green trucks is also a good stimulus within the context of greening of the mobility in freight traffic.