In the current economic climate, we are seeing more and more companies relying on multi-source financing: they generate the funds necessary for their development by combining investment subsidies, grants, tax breaks, and various preferential loans.
Although this strategy can provide a significant competitive advantage, failure to comply with state aid rules carries serious risks. The lawful and well-documented use of state aid is now not only a matter of compliance, but also a reputational factor.
How much investment support can a medium-sized company receive?
European Commission "Guidelines on regional state aid (2021/C 153/01) ” clearly defines the amount of investment aid that can be granted in the territories of individual EU Member States, depending on the location of the investment.
In most of Hungary, 50% support is available for large companies, while for small and medium-sized enterprises this rate may be higher.
Aid intensities by region:
| Investment Location | Small business | Medium-sized enterprise | Large company |
|---|---|---|---|
| Győr-Moson-Sopron, Vas, Zala, Komárom-Esztergom, Fejér, and Veszprém counties | 50% | 40% | 30% |
| Heves, Baranya, and Borsod-Abaúj-Zemplén counties | 80% | 70% | 60% |
| Budapest | 0% | 0% | 0% |
| In all other counties | 70% | 60% | 50% |
When applying this rule, it is important to note that the restriction also applies to investments initiated by a group of companies in the same region within 3×365 days and to the related investment aid, as well as to other aid used for the same eligible costs.
Can the company still claim de minimis aid?
For businesses engaged in general economic activities (i.e., not fishing or agriculture), European Commission Regulation 2023/2831 (General Block Exemption Regulation) sets out the rules for de minimis aid.
Under the regulation, a business can receive a maximum of €300,000 per Member State.
In order to determine whether the company is still eligible for de minimis aid, de minimis aid granted in relation to projects started within 3×365 days prior to the start of the aided activity must be taken into account.
How can I combine individual investment subsidies?
The most important principle is that the total intensity of aid per eligible cost (e.g., investment aid or de minimis aid) may not exceed the maximum investment aid rates specified in the European Commission's Communication "Guidelines on regional state aid (2021/C 153/01)".
For example, in the case of medium-sized companies, this may be the maximum specified in the legislation, 50% + 10%.
If the company exceeds this limit, it may even be required to repay the entire amount, but it will definitely have to repay any amount exceeding the investment aid available.
Our experience shows that preliminary cost breakdowns, accurate resource planning, and clear separation and demarcation of projects are the most effective methods for ensuring compliance with the rules.
Group-wide approach
However, the examination of aid accumulation does not stop at the project level: according to EU legislation, the entire group of companies must be taken into account.
It is particularly important in the case of de minimis aid and all investment aid that the limits for the three-year period are checked at group level.
To address this issue, IBSH experts have developed a support accumulation audit that helps uncover hidden overlaps and prevent irregularities.
What are some typical examples of subsidy stacking?
The most common examples in recent times are the SME 1+1 Investment Stimulus Program, the combined use of interest-subsidized loans and development tax credits.
For example, if a company decides to finance its investments for the following year with a preferential, interest-subsidized loan and participates in the SME 1+1 Investment Stimulus Program announced in the Sándor Demján Program. The company also takes advantage of a development tax credit for its investment in order to reduce its corporate tax liability.
In this case:
- The interest subsidy on the loan is considered aid, and the lender issues a certificate specifying the type and content of the aid, typically de minimis aid.
- According to the SME 1+1 Investment Stimulus Program, the company is utilizing regional investment support for its equipment purchases.
- According to development tax incentives, corporate tax savings also qualify as investment support.
In such cases, it is the responsibility of the company applying for support to determine whether it complies with the relevant European Union and domestic legislation.
If the company is a medium-sized enterprise and the investment is carried out in Bács-Kiskun County, the maximum investment aid available is up to 60% of the investment costs.
As the company has been awarded a 50% non-repayable grant under the SME 1+1 Investment Stimulus Program, the planned development tax credit and interest subsidy together may not exceed 10% of the investment costs.
At the same time, it is important to note that the de minimis framework allows for the use of interest subsidies.
Balancing opportunity and security
Successful grant management is not only about the amount of funding obtained or the number of successful applications, but also about strategic coordination.
A company can maximize the impact of subsidies if it is aware of intensity limits, knows which instruments can be combined, and receives reliable background support in complying with regulations.
To address this issue, IBSH experts developed the subsidy stacking audit, which helps uncover hidden overlaps, prevent illegal subsidy stacking, and safely combine investment and operating funds.
