ÖzbekCPA Assessment
The European Union Green Deal process is not only an environmental transformation for companies; it is also a comprehensive transformation process that directly affects the areas of financial reporting, cost structure, tax compliance, and corporate governance. The Green Deal Compliance Project Support, implemented in Turkey to support compliance with this transformation process, creates a significant strategic advantage for companies when properly designed.
At ÖzbekCPA, we view this support not merely as “consulting expense support,” but as a multi-layered transformation project that must be integrated into companies’ accounting infrastructure, financial reporting, and tax compliance processes.
General Framework of the Support Mechanism
The Green Deal Compliance Project Support aims to analyze the current status of exporting and manufacturing companies in the areas of sustainability, digital transformation, and governance, to create a roadmap based on this analysis, and to implement the identified projects.
The support process consists of three main phases:
- Phase 1: Current status analysis and sustainability roadmap
- Phase 2: Implementation consulting for projects within the scope of the roadmap
- Phase 3: Monitoring, verification, and reporting of improvements made
All three phases are supported at a rate of 50% and within a 5-year support period.
Why is it critical from an accounting and financial management perspective?
The most significant issue we frequently observe in practice is that Green Deal projects are treated solely as “technical or environmental” initiatives. However, these projects directly impact:
- The company’s cost structure,
- Expenditures to be capitalized or expensed,
- Accounting for incentives and support,
- Tax risks,
- Independent audit and reporting processes
Therefore, conducting the Green Deal Compliance Project independently of the accounting and finance function poses serious risks of compliance and support loss.
ÖzbekCPA Approach: Integrating the Green Deal into Accounting
At ÖzbekCPA, we approach this process on behalf of companies as follows:
1. Financial Reading of Phase 1 Process
While preparing the current situation analysis and sustainability roadmap;
- The company’s current cost centers,
- Accounting separation of energy, production, logistics, and supply chain expenses,
- Financial impacts of sustainability investments,
- Medium and long-term cash flow projections
are evaluated simultaneously. This ensures that the prepared roadmap is not only technically but also financially feasible.
2. Ensuring Support Accounting and Tax Compliance
For expenditures covered by support:
- Whether they are expenses or investments to be capitalized,
- The method of accounting for incentive income,
- The impact on the tax base,
- Transfer pricing and related party risk
are clarified at the outset. This prevents future risks such as tax audits, support clawbacks, or accounting corrections.
3. Integration of Phase 2 and Phase 3 into Financial Reporting
The impact of projects implemented during the implementation and monitoring phases on:
- Financial statements,
- Consistency between sustainability reports and financial statements,
- Creation of audit trails
are closely monitored by ÖzbekCPA. Especially in TSRS, GRI, or integrated reporting processes, the alignment of financial and non-financial data becomes critical.
Common Risks (ÖzbekCPA Warns)
The most common risk areas encountered in practice are:
- Consulting invoices not being in line with market rates
- Receiving services from companies that fall under the definition of related parties
- Incorrect accounting of expenses
- Phase 1 report not being prepared in accordance with supporting legislation
- Missing support application deadlines
These errors can lead not only to loss of support but also to undermining the reliability of financial statements.
