The Amendment of the Income Tax Act

15. December 2022 | Reading Time: 1 Min

The amendment, effective from 1 January 2023, proposes an extension of the extraordinary depreciation regime for tangible assets of the first and second depreciation groups. The changes apply to property acquired between January 1, 2021 and December 31, 2023.

Further, the amendment introduces the so-called a “windfall tax”– i.e. tax on unexpected profits for large-scale energy, oil, banking, and mining companies. The windfall tax will apply for the period of calendar years 2023 to 2025.

The tax base for windfall tax is the amount exceeding the companies’ average of tax bases of periods 2018-21, such average being increased by 20 percent. A tax rate of 60% will apply on such tax base.

Moreover, the amendment introduces a special treatment for immovable property which, due to an earlier misinterpretation, have been wrongly registered on the list of immovable cultural property in the past and were thus incorrectly considered as an immovable cultural property for tax purposes. A company which owns such an immovable property has two options. Either it can continue to consider this immovable property as an immovable cultural property and continue with the tax depreciation of its technical improvements under the regime of immovable cultural property, or it can decide, based on legal opinion, that it is not an immovable cultural property. Such a decision and related correction of tax depreciation should be performed only in the tax period starting in 2022.

If your company owns immovable cultural property, we recommend carrying out a legal review as to whether such property meets the legal definition of immovable cultural property.

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