Green transition: new EU tax incentives

The European Commission adopted a new recommendation on tax incentives in support of the Clean Industrial Deal, a strategy that integrates growth, competitiveness, and decarbonization of European industries. The document responds to the priorities outlined in the "Competitiveness Compass" communication and the Clean Industrial Deal Communication (CID), setting as main goals the reinforcement of investments in clean technologies, industrial resilience, and support for a fair transition to a zero-emission economy.

The recommendation is based on the assumption that tax incentives are a key tool for accelerating the green transition, promoting the production and adoption of clean technologies, the decarbonization of production processes, and the creation of new quality jobs. According to the Commission, the EU must increase annual investments in energy, industrial innovation, and transport by around 480 billion euros compared to the previous decade to achieve its climate and industrial targets.

Tax credits, accelerated depreciation and managerial flexibility

The new guidelines recommend that Member States introduce a mix of innovative and targeted tax tools:

• tax credits for green investments: companies will be able to benefit from tax credits for projects that increase production...