Members of the National Council of the Slovak Republic have submitted a draft amendment to Act No. 57/2018 Coll., on Regional Investment Aid, which is also to amend the Income Tax Act.
The main objective of the amendment to the Act is to eliminate the adverse effects of the energy crisis and to mitigate the obligations for recipients of investment aid. The modified conditions also apply to potential applicants for regional investment aid, which are intended to attract new investors.
The amendment brings several temporary changes. The most significant proposed changes are:
- extension of the time limit for the start of the business activity specified in the investment plan and extension of the time limit for the completion of work on the project,
- reduction in the value of the minimum increase in production,
- reduction of the minimum investment costs to be invested in the project in 2023 and 2024,
- reduction in the value of the minimum growth in job positions under the project in 2023 and 2024.
The proposed amendment to the Act is also intended to introduce a change to the Income Tax Act that would extend the period during which recipients of investment aid will be able to claim income tax relief. Generally, entrepreneurs that have been approved for investment aid in the form of income tax relief are entitled to apply tax allowance for a maximum of 10 immediately consecutive tax periods, subject to the statutory conditions being met. It is proposed not to include the following tax periods in the time limit for starting to apply the tax relief:
- the years 2023 and 2024, if the recipient of investment aid is entitled to tax relief also after 31 December 2022,
- the years 2024, 2025 and 2026, if 2023 is the first tax period in which the recipient can apply income tax relief.
The amendment to the Act is proposed to take effect on the date of its announcement.