Corporate tax in 2026: key changes and practical examples

Corporate tax changes come into effect from 2026. Main changes, examples, comparisons with previous regulations and advice:

1. INCREASE IN CORPORATE TAX RATES

From 2026. :

• The standard corporate tax rate increases from 16% to 17%;
• The preferential rate for small companies increases from 6% to 7%.

7% rate applies to those small companies whose taxable income does not exceed 300,000 euros.

Also from 2026 with the 7% rate, there is no longer any limitation on the number of employees (previously up to 10 employees were allowed).

The new rates will be applied when calculating:

• annual corporate income tax;
• advance corporate income tax, for 2026 and all subsequent tax periods.

2. 0% PROFIT TAX FOR NEW SMALL ENTERPRISES – 2 YEARS

Until now, new small enterprises could apply 0% corporate income tax for 1 year. From 2026 šthis period is extended to 2 years. 0% rate may be applied if:

• annual income does not exceed 300,000 euros;
• all owners of the company are natural persons;
• during the first 3 years of operation:
  • shares or parts are not transferable;
  • activity is not suspended;
  • the company is not liquidated or reorganized.

3. NEW „INSTANT" DEPRECIATION OF FIXED ASSETS

A new benefit is introduced in the Income Tax Law – instantaneous depreciation of fixed assets.

This means that a company can recognize the entire acquisition cost of a fixed asset as an expense immediately in the year the asset is put into use, rather than depreciating it over several years.

The nature of the company's activities does not matter. The most important condition – The asset must be used in the activity for at least 3 years.

Asset groups that are subject to the exemption:

• machinery and equipment;
• buildings and structures;
• computer and communication equipment;
• software;
• acquired rights (licenses, patents, etc.);
• trucks, trailers, semi-trailers, buses (if they meet the requirements, e.g., are not older than 5 years).

If the entire acquisition value of the asset was Once recognized as allowable deductions, such assets must be used in operations for at least 3 years. If this condition is not met, then companies must:

• recalculate the income tax for previous years, the value of the asset that was written off is adjusted;
• apply the depreciation or amortization rates set out in the Income Tax Law, i.e. as if the instant write-off had not been applied;
• adjust the corporate income tax returns for previous periods.

Since the corporate income tax will increase after the recalculation, it is very likely that late payment interest will be calculated for late tax payment.

Recalculation of taxable profit for previous periods is not required if:

• - the company is liquidated or reorganized;
• - the assets are lost due to force majeure or criminal acts;
• - the assets are transferred during the reorganization;
• - the assets are transferred in accordance with the law Acts.

It is important to note that the instant depreciation of the acquisition price of a fixed asset cannot be applied to a fixed asset whose acquisition costs already reduce taxable profit under the applicable investment project benefit.

This means that:

If it is planned or expected that the acquisition costs of a specific asset will be attributed to the investment project benefit, instant depreciation cannot be applied to such an asset;

The acquisition costs of such an asset must be recognized in the usual manner for corporate tax purposes (i.e. through depreciation).

Both benefits cannot be applied simultaneously – the company must choose only one.

Differences between instantaneous depreciation and investment project benefits

If the investment project benefit is used in full, the company can "deduct" the same asset for tax purposes twice: the first time through ordinary depreciation, the second time – through an additional investment project benefit deduction. Meanwhile, instantaneous depreciation allows for a deduction only once, therefore it is less useful than the investment project benefit.

The instantaneous depreciation benefit applies only to assets purchased from 2026-01-01 — it does not apply to older assets purchased before 2026.01.01. Ši „instant" long-term The asset depreciation allowance is applied only for the calculation of Income Tax, in the reports the asset will be depreciated in the usual way.

Examples:

Example 1. Comparison of the impact of instantaneous depreciation and traditional depreciation on the calculation of income tax.

A company buys a computer for 1,200 €. Profit beforeš allowances – 10,000 €.

When applying instantaneous depreciation:

Profit = 10,000 € – 1,200 € = 8 800 €
Corporate tax = 8,800 × 17% = 1,496 €

Without applying instantaneous depreciation:

Annual depreciation = 400 €
Taxable profit = 9,600 €
Corporate tax = 9,600 € × 17% = 1,632 €

Example 2. Comparison of the impact of instantaneous depreciation and investment project allowance on the calculation of corporate tax.

A transport company purchases a tractor in 2026 for 100,000 €. Plans to use for more than 3 years.

Profit beforeš allowances: 120,000 €

Applying instantaneous depreciation:

2026.

• One-time expenses: 100,000 €
• Taxable profit: 120,000 € – 100,000 € = 20,000 €
• Profit tax: 20,000 € × 17% € = 3 400 €

2027

• Depreciation: 0 €
• Taxable profit: 120 000 €
• Profit tax: 120 000 € × 17% = 20 400 €

The company decided to sell the truck after 2.5 years (2028)

There is an obligation to recalculate the profit tax.

Truck depreciation rate – 4 years.

2026.

• Depreciation: 100,000 € / 4 years = 25,000 € / year
• Taxable profit: 120,000 € – 25,000 € = 95,000 €
• Profit tax: 95,000 € × 17% = 16,150 €

2027

• Depreciation: 25,000 €
• Taxable profit: 120,000 € – 25,000 € = 95,000 €
• Corporate tax: 95,000 € × 17% = 16,150 €

Result: For 2026, the company had to pay an additional 12,750 € in corporate tax (16,150 € - 3,400€) and pay the interest accrued on that amount.

Applying the investment project benefit:

2026.

• Depreciation: 100,000 € / 4 years = 25,000 € / year
• Profit after depreciation: 120,000 € - 25,000 € = 95,000 €
• Profit beforeš benefits: 95,000 €, maximum benefit per year can be used up to 50% - 47,500 €.
• Taxable profit: 95,000 € - 47,500 € = 47,500 €
• Profit tax in 2026: 47,500 € × 17% = 8,075 €

2027

• Unused part of investment project benefit: 100,000 € – 47,500 € = 52,500 €
• Taxable profit after depreciation: 120,000 € – 25,000 € = 95,000 €
• The maximum amount of benefit that can be used per year is - 47,500 €.
• Profit tax in 2027: 47,500 € × 17% = 8,075 €
• There is an unused investment project benefit remaining – 5,000 €, which can be used in the following year.

When applying the investment project benefit when selling a tractor unit – no additional adjustments are required. Even if sold after 2.5 years, there is no need to “restore” the benefit.

End result - The investment project benefit usually provides a greater tax benefit than instantaneous depreciation, but its application requires stricter conditions (appropriate asset category, minimum useful life, documentation). Instantaneous depreciation is simpler and can be used as an alternative if the company does not intend to sell the asset in the near future.

4. GROUP LOSS CARRIAGE RESTRICTION

From 1 January 2026 The rules for deducting corporate tax losses will be unified.

This means that the same 70% limit will apply to all losses:

• losses incurred by the company itself;
• losses taken over during reorganization;
• losses taken over from other companies in the same group of companies.

A company will be able to cover losses up to 70% of its taxable profit for that year.

Losses can be carried forward only if the companies have continuously belonged to the same group for at least 2 years before the end of the tax period in which the losses are used.

Example:

1. Total loss amount:

Company A:

• Loss: 20 000 € + 30 000 € = 50,000 €
• Maximum deduction limit = 70% of taxable profit

48,000 € × 70% = 33,600 €

In Company A, only 33,600 € can be deducted, the remaining 16,400 € can be carried forward (if the company remains part of the group for 2 years)

Company B:

• Loss: 40,000 € + 15,000 € = 55,000 €
• Maximum deduction limit = 70% of taxable profit

100,000 € × 70% = 70,000 €

Company B's loss amount is 55,000 € does not reach the limit, so the entire amount can be deducted.

2. Corporate income tax after deduction of losses:

Company A:

• Profit 48,000 € – 33,600 € = 16,400 €
• Corporate income tax = 16,400 € × 17% = 2,788 €

Company B:

• Profit 100,000 € – 55,000 € = 45,000 €
• Profit tax = 45,000 € × 17% = 7,650 €

5. STEM SCHOLARSHIP BENEFIT

Companies will be able to reduce their corporate tax by paying scholarships to students in the STEM field (mathematics, life sciences, engineering or technology). In other words, companies are given the opportunity to encourage and motivate students to get a job with the company after graduation. It is also possible to deduct scholarships for researchers carrying out a research and experimental development project without limiting the amount.

In order for a scholarship paid by a company to be classified as a deduction for corporate income tax purposes, it is necessary to meet all of the following conditions:

• A tripartite agreement between the company, the educational institution and the student;
• The student cannot be an employee of the company or a family member of a shareholder or current employee of the company;
• During the scholarship payment period, the scholarship recipient cannot own more than 10 percent of the company's shares;
• The scholarship cannot be related to work performed or being performed, services provided or rendered by the scholarship recipient to the company;
• The scholarship cannot exceed 2 500 € per year.

Example:

• A company pays corporate income tax: 17%
• A company decides to award a scholarship to a student in the STEM field
• Scholarship paid to the student: 1,000 € per year

Scholarship costs: 1,000 €
Company profit before taxes: 50,000 €

Corporate income tax without scholarship deduction: 50,000 € × 17% = 8,500 €

Profit tax with STEM scholarship deduction: 50,000 € - 1,000 € = 49,000 € (income reduced)
Profit tax: 49,000 € × 17% = 8,330 €

Tax savings: 8,500 € - 8,330 € = 170 €

We would like to emphasize that each benefit depends on the specific situation. If you have a certain situation and want to take advantage of the benefit, please contact your company's accounting specialists to calculate the potential benefits in your case.