The EC has approved the state aid scheme "Aid for investments in agricultural holdings through the assignment of corporate income tax”. Tax relief for registered farmers, which is in fact a state aid for investments in agricultural holdings was introduced with Art. 189b pursuant to the Law on Corporate Tax Income (CTIL). As the European Commission gave a positive statement of opinion on compliance with the rules on state aid before March 31, 2011, the tax relief could be also applied for 2010.
The aid aims to encourage farmers to invest in new buildings and new agricultural equipment in the production of unmanufactured animal and plant production. The scheme provides for each taxable entity 60 percent of corporate tax on taxable profit to be assigned, derived from activities in the field of producing unmanufactured animal and plant production. Assigned tax should be invested in new buildings and new agricultural machinery necessary to carry out the indicated activity he deadline for them being the end of the year following the year for which the assignment is enjoyed..The activity should continue to be carry out for at least three years after the date of transfer.
The scheme provides for the aid to be granted automatically by filing an annual tax return by the recipient (taxable entity). Aid will be provided to taxpayers (legal entities and sole proprietors) – farmers who:
are registered under Ordinance № 3 of 1999 on establishing and maintaining a register of farmers;
have no pending public obligations to the state;
are not parties in proceedings for bankruptcy or been declared bankrupt;
are not parties in liquidation proceedings;
are not defined as establishments in difficulty.
Assigned tax can not exceed 50 percent of the value of assets acquired (new buildings and new agricultural machinery) in less-favored areas or in areas under Article 36, point a), i), ii) and iii) pursuant to the Regulation (EC) № 1698/2005, dodefiend by the Member States under Articles 50 and 94 of the Regulation and 40 percent of the value of assets acquired in other areas.
It is envisaged the tax relief under Art. 189b of the Law on Corporate Tax Income to be applied until the end of 2013.