tax allowance of investments serving energy efficiency purposes

A tax allowance can be applied when implementing and operating investments in assets resulting in the improvement of energy efficiency. 

According to the taxpayer's choice, the tax allowance may be applied in the tax year of putting into operation of the investment, the following tax year or in the five following tax years. The total amount of the tax allowance may not exceed, depending on the region, 30, 35 or 45 percent of the eligible costs (which may be increased further by 20 percentage points in the case of small and 10 percentage points in the case of medium size enterprises) but maximum the forint equivalent of 15 million Euros. Legal regulation provides for a compulsory operation time of 5 years. 

For the purposes of the tax allowance, eligible costs are: 

  • The purchase value of the tangible or intangible assets directly related to the attainment of higher level of energy efficiency provided that these assets can be specified as a separate investment within the investment value, or 
  • the part of the purchase value of the tangible or intangible asset directly serving energy efficiency purposes, which is incurred as an extra expense relative to the less energy-efficient investment that the taxpayer would have implemented in the absence of the tax allowance or other form of state subsidy. 

70 percent of the tax payable may be applied as tax withholding. 

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