Tax exemption incentive for reinvested profit

The tax holiday is a fiscal incentive whereby profits used for the acquisition or production of certain eligible assets (mainly technological equipment, machinery, installations, including IT equipment) are exempt from Corporate Income Tax.

According to the previous legal provisions, the tax exemption for reinvested profits had a temporary nature, and with the entry into force of the new legal provisions, this incentive may become permanent, under certain conditions.

In this regard, the following rules apply:

• For 2026, taxpayers can opt for the accelerated depreciation method for certain asset categories.
• After a minimum period of five (5) years, reserves from reinvested profits may either be distributed as dividends (in which case 50% of the amount becomes taxable) or used to increase share capital or to cover accounting losses (in which case the amounts are not subject to taxation).
• In case of used reserves, regardless of whether they are taxable at the time of use or not, the tax rules specific to the dividend distributions are applicable.

In this regard, we recommend the following:

• Assessment of the opportunity to apply the tax incentive in relation to the eligible assets and the fulfilment of all the conditions provided by the legislation in force.
• Review of planned activities and investment plans, to the extent that future investments can be aligned with the applicability of the tax incentive;
• Analysis of the existing reserves at the level of the company and identification of the reserves related to the reinvested profit, respectively monitoring the period of five (5) years after which they can be used.

Our team is at your disposal to provide expert assistance in analysing your individual tax situation and assessing the applicability of this facility, understanding its impact on investment plans, identifying eligible assets, conducting analyses and forecasts for various investment scenarios, as well as advising on the use of reserves from reinvested profits and the related tax implications, including support throughout the application and compliance process.

For further details, please contact us below.