From 2021 taxpayers which can benefit from “Estonian CIT” can include in tax costs investment expenses instead of deprecation or Estonian CIT. In the beginning the taxpayer is obligated to create separate bank account dedicated to this fund. The money collected on this account must come from net profit from previous year. If expenses from this fund are spent on investments, they are recognized as taxable costs when mentioned costs are incurred. Consequently, the “German investment fund” is a faster way to include investment expenses in tax costs than deprecation.
It is worth mentioning, that “German investment fund” is recognized as a “the minimis aid” in the meaning of the EU Rules.
“German investment fund” is an alternative solution to Estonian CIT, which one the one hand is simpler, on the other hand is can be less profitable.