The long-announced amendment to the Corporate Income Tax Law has been approved by the Council of Ministers.

In today’s summary of the changes potentially set to take effect next year, we will look at the minimum tax.

The most important aspect of the changes is the suspension of the minimum tax introduced at the beginning of this year for a period of 2 years. The tax was aimed at entities that had either an operating loss or a profitability of no more than 1%. Under the original announcements, the minimum tax was to be suspended until the end of this year, i.e. December 31, 2022. This was the message that appeared in the Ministry’s announcements, however, as we can read at this point in the draft- the tax will most likely be suspended until the end of next year as well. This means that taxpayers will not pay this tax until 2025. (According to the regulations, the tax is paid by the end of March of the following year for the year it applies to, together with the annual return filed).

The number of entities that will not pay the tax in question has also expanded. These include:

– municipal companies;

– medical entities;

– small taxpayers, i.e. with annual revenues not exceeding €2 million in the previous year;

– taxpayers declared bankrupt, liquidated or subject to restructuring proceedings;

– factoring companies; and

– taxpayers whose tax profitability in one of the last three fiscal years exceeded 2 percent.

According to an earlier draft, the tax will not be paid by financial companies as defined in Article 15c(16) of the CIT Law, or by companies with revenues at least 30% lower in relation to the previous year.

As it stands, there will also be changes regarding its calculation. The level of profitability that will determine the need to pay the tax has been raised to 2%. For the purpose of the calculation, the deductible costs of leasing fixed assets, the excise tax paid, the increase in the deductible costs of electricity or heat will not be taken into account, in addition to the issue of contributions to the Labor Fund and the Solidarity Fund, as well as the portion of labor costs related to wages or benefits paid by the workplace.