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Investment Promotion Act Overview

Download Investment Promotion Act Overview in pdf here.

Incentive measures defined by the Act:
A. Tax incentives – decrease of the corporate income tax rate, depending on the amount of the investment and the number of new jobs created,
B. Customs incentives – customs exemption for importing machinery/equipment, depending on the customs tariff,
C. Non-refundable aid for eligible costs of new jobs created – depending on the unemployment rate in the county in which the investment is located,
D. Non-refundable aid for eligible training costs – depending on the size of the enterprise and the type of the training,
E. Additional non-refundable aid for eligible costs of new jobs created in specific business activities – depending on the type of the business activity non-refundable aid for new jobs created is multiplied by certain percentages,
F. Non-refundable aid for the purchase of high-tech equipment/machinery for development and innovation activities – non-refundable aid of up to 20% of eligible costs of the purchase of machinery/equipment,
G. Non-refundable aid for capital investments above 5 million € and above 50 new jobs created – depending on the unemployment rate in the county in which investment project is located,
H. Non-refundable aid for new jobs created in labour intensive investment projects – depending on the number of new jobs created.

A decrease of the corporate income tax rate is calculated based on the submission of the annual Income Tax Statement.

Non-refundable aid for investment in long-term assets is granted after the first year of investment expires, while non-refundable aid for new jobs created is granted one year after new jobs were created.

MINIMUM AMOUNT OF INVESTMENT IN FIXED ASSETS
  • € 50,000 and 3 new jobs created for micro enterprises
  • € 150,000 and 5 new jobs created for small, medium and large enterprises

The recipient of incentive measures can be an entrepreneur – natural person (craftsman) profit taxpayer or commercial company.

An application to acquire the status of a recipient of incentive measures must be submitted before the beginning of the investment.

Obligations of the recipient of incentive measures – submission of the annual report on the status of the investment project to the responsible ministry and Ministry of Finance – Tax Authority. The Annual Report is submitted together and in accordance with the deadlines for the submission of an annual income tax statement and in accordance with the Corporate Income Act.

Besides manufacturing activities, incentive measures are also intended for the following business activities:

BUSINESS ACTIVITIES THAT CAN BENEFIT FROM INVESTMENT MEASURES
Development and innovation activities Business support activities High value-added services
Improvement and modernization of:

  • Products
  • Production series
  • Production processes
  • Manufacturing technologies

 

  • Customer/Client contact centres
  • Centres for outsourced business activities
  • Logistics and distribution centres
  • ICT system and software development centres

 

  • Creative services activities
  • Tourism services activities
  • Management, consulting, education services
  • Industrial engineering services

 

The classification of enterprises according to the Small Business Development Promotion Act (OG 29/02, 63/07, 53/12)
Enterprise category Number of employees and Turnover or Balance sheet total
Medium ≤ 249 ≤ € 50 mil ≤ € 43 mil
Small ≤ 49 ≤ € 10 mil ≤ € 10 mil
Micro ≤ 9 ≤ € 2 mil ≤ € 2 mil