Companies in the agricultural sector will be able to increase IRC by 40% of the expenses incurred in their activity
The State Budget for 2023 (Law 24D/2022, December 30 - through its article 232) introduced a new tax benefit that aims to mitigate the effects of inflation on production costs for these companies.
It is of temporary application, i.e. it will still apply for the previous year (2022) and the year 2023.
Who can use
Charges covered
The Government proposes, for 2022 and 2023, to increase by 40% the expenses and losses incurred with the acquisition of the following goods when used for agricultural production activities:
- a) Organic and mineral fertilizers and correctives;
- (b) Flours, cereals and seeds, including mixtures, wastes and residues from the industries
food, and any other products suitable for feeding livestock, poultry and others
animals, referenced in the Codex Alimentarius, regardless of breed and functionality in
life, intended for human consumption;
- c) Water for irrigation;
- d) Glass bottles.
Limitations - de minimis aid
The tax benefit foreseen in the previous numbers is subject to the de minimis aid rules.
Commission Regulation (EU) 1408/2013 of December 18, 2013, as amended by Commission Regulation (EU) 2019/316 of February 21, states that "... the total amount of de minimis aid granted per Member State to a single enterprise shall not exceed €20,000 over any period of three fiscal years...".
Practical Example
A farmer who spent 20,000 euros on water for irrigation and fertilizers in 2022 will be able to deduct 28,000 euros when determining his taxable income, considering the increase he receives, i.e. he will reduce his taxable income by 8,000 euros due to the increase in expenses.
If your company fits these requirements and you want to know more about which accounting movements to make, tax returns to file, or have any other questions you would like to have clarified, Viseeon, as a network of accountants, has specialists who can help you through the process.
