Tax licence

What it means

The tax licence was a minimum corporate income tax that companies had to pay from 2014 to 2017 even when they made a loss or their computed tax was lower. If the calculated corporate income tax was below the licence amount, the company paid the licence instead.

The amount depended on annual turnover and VAT registration: 480 euros for non-VAT payers with turnover up to 500,000 euros, 960 euros for VAT payers with the same turnover and 2,880 euros for companies with higher turnover. The difference paid could be credited against tax in the following three years.

The licence was abolished, and the 2024 consolidation package brought it back as the minimum corporate tax, applied to tax periods from 2025. The new minimum tax has more revenue bands and different rules, but the principle is similar.

How it works in practice

The licence can still come up in retrospective audits and amended returns for 2014 to 2017. If an audit changes the tax base, it can also change whether the company paid the licence or the computed tax, and with it the amount available for credit.

Today the licence is useful as a lesson. It showed that a minimum tax mainly burdens small and new companies and dormant ones, which often preferred to close. Many inactive limited companies went into liquidation at the time to avoid paying it.

With a tax loss, the licence did not prevent loss carry-forward: the loss continued to be carried forward while the licence was paid alongside. The current minimum tax works similarly, so it pays to plan how losses and the minimum tax will interact in later years.

What to watch out for

The tax licence should not be confused with a business licence or a software licence. It is purely the historical name of the minimum corporate income tax, and in practice the term is sometimes still used for the current minimum tax.

Anyone acquiring an older company or carrying out due diligence should check that licences were paid and correctly credited. Arrears from the licence years may have led to enforcement or frozen funds, and for limitation periods the specific actions of the tax authority must be assessed.