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New CIT incentive for electric battery investment projects

As of 2024 a new, significant corporate income tax (CIT) incentive is introduced for investment projects aiming at construction of electricity storage facilities (i.e. batteries).

In addition to the  2024 tax changes , the Hungarian government has introduced further favourable legislative changes to support green energy.

In line with the new CIT rules, a CIT incentive is available upon investments aiming at construction of electricity storage facilities (i.e. batteries) under Section 22/H of Act LXXXI of 1996 (CIT Act) (hereinafter “Electricity storage CIT incentive”).

The purpose of the Electricity storage CIT incentive is to support and encourage companies to establish new electricity storage facilities that enable them to store electricity generated for their business needs.


CIT incentive on electricity storage (batteries)

The Electricity storage CIT incentive may be claimed in the tax year when the investment (i.e. electricity storage) is put into operation – or, at the discretion of the taxpayer, in the tax year following the year of putting into operation – and in the five subsequent tax years, i.e. for a total of six tax years.

The amount of the CIT incentive is 30% of the eligible costs per taxpayer per project in present value, however, it can not exceed the HUF equivalent of EUR 30 million. (the 30% rate may be increased by an additional 20 percentage points for small enterprises and 10 percentage points for medium-sized enterprises). 

Eligible costs mean the gross value of the electricity storage investment.  

Conditions of the Electricity storage CIT incentive

One of the main conditions to apply for this CIT incentive is that a special notification has to be submitted to the Ministry of Finance via an electronic form before the planned starting date of the given investment. 

In addition to the above, the taxpayer must already have a valid and effective grid connection and grid usage contract at the time of submitting the corporate income tax (CIT) return in which this new CIT incentive is first applied.

Please note that this tax incentive may be applied provided that in a given year at least 75% of the energy in the electricity storage is deriving from a renewable energy power plant unit and the 5-year mandatory operating period is met for the assets capitalised as part of the investment.

The above-detailed tax incentive has several further rules and conditions. If your company is planning to carry out an investment related to electricity storages, our RSM experts are happy to assist you with a detailed presentation of the tax incentive and the preparation of calculations and tax returns. 

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