OzbekCPA Assessment
The European Green Deal is not merely an environmental transformation for companies; it represents a comprehensive shift that directly impacts financial reporting, cost structures, tax compliance, accounting systems, and corporate governance.
In Türkiye, the Green Deal Compliance Project Support has been introduced to facilitate this transition. When structured correctly, this support mechanism offers companies not only financial assistance but also a strategic competitive advantage.
At OzbekCPA, we do not view this incentive solely as a consultancy expense subsidy. Instead, we approach it as a multi-layered transformation project that must be fully integrated into a company’s accounting infrastructure, financial reporting framework, and tax compliance processes.
General Framework of the Green Deal Compliance Project Support
The Green Deal Compliance Project Support aims to assess the current status of exporting and manufacturing companies in the areas of:
- sustainability,
- digital transformation, and
- governance,
and to establish a structured roadmap based on this assessment, followed by the implementation of identified projects.
The support mechanism consists of three main phases:
Phase 1: Current Status Analysis and Sustainability Roadmap
Phase 2: Implementation Consultancy for Roadmap Projects
Phase 3: Monitoring, Verification, and Reporting of Improvements
All three phases are supported at a 50% rate within a five-year support period.
Why Is This Support Critical from an Accounting and Financial Management Perspective?
One of the most common mistakes observed in practice is treating Green Deal projects solely as technical or environmental initiatives. In reality, these projects have a direct impact on:
- the company’s cost structure,
- whether expenditures should be capitalized or expensed,
- accounting treatment of incentives and grants,
- tax exposure and compliance risks, and
- independent audit and financial reporting processes.
Therefore, managing the Green Deal Compliance Project independently from the accounting and finance function may result in significant compliance failures, incentive losses, and audit risks.
OzbekCPA’s Approach: Integrating the Green Deal into Accounting and Finance Systems
1. Financial Interpretation of Phase 1
During the preparation of the current status analysis and sustainability roadmap, OzbekCPA simultaneously evaluates:
- existing cost centers,
- accounting segregation of energy, production, logistics, and supply chain expenses,
- the financial impact of sustainability investments, and
- medium- and long-term cash flow projections.
This ensures that the roadmap is not only technically sound but also financially feasible and sustainable.
2. Support Accounting and Tax Compliance Structuring
At the initial stage of the project, the following issues are clearly defined:
- whether expenditures qualify as operating expenses or capital investments,
- the accounting treatment of incentive income,
- the impact on the tax base, and
- potential transfer pricing and related-party risks.
This proactive approach significantly reduces the risk of tax audits, incentive clawbacks, or retrospective accounting corrections.
3. Integration of Phases 2 and 3 into Financial Reporting
Throughout the implementation and monitoring stages, OzbekCPA closely tracks:
- the impact of Green Deal projects on financial statements,
- consistency between sustainability reports and financial disclosures, and
- the establishment of audit trails and documentation.
This alignment becomes particularly critical in TSRS, GRI, and integrated reporting frameworks, where the consistency of financial and non-financial data is essential.
Common Risks in Green Deal Compliance Projects
Based on OzbekCPA’s practical experience, the most frequent risk areas include:
- consultancy invoices that are not aligned with market value,
- services procured from related-party entities,
- incorrect accounting classification of expenditures,
- Phase 1 reports that do not fully comply with support legislation, and
- missed application and reporting deadlines.
These issues may lead not only to the loss of incentives but also to a deterioration in the reliability and credibility of financial statements.
The Green Deal Is a Financial Transformation Project
When managed correctly, the Green Deal Compliance Project is not merely an environmental obligation; it is a powerful tool for cost optimization, financial transparency, and long-term corporate sustainability.
An integrated accounting, finance, and tax-focused approach is essential to maximize the benefits of the support mechanism while minimizing compliance and audit risks.
OzbekCPA provides comprehensive advisory services by addressing Green Deal Compliance Projects through their technical, financial, and tax dimensions simultaneously, ensuring a robust and sustainable transformation for companies.
