New Transition 5.0 Plan: how the 2026-2028 hyper-depreciation works for digitalization and energy

Anyone searching for 'Transition 5.0' today will find many pages describing a measure that is no longer accessible. The tax credit introduced by Decree-Law 19/2024 is closed to new investments, and from 2026 support for the twin transition is delivered through a different mechanism.

The new mechanism is called the New Transition 5.0 Plan, but it is no longer a tax credit: it is hyper-depreciation, meaning an uplift on deductible costs. The substance changes, not just the name, and so does who benefits from it.

In brief:

• The Transition 5.0 tax credit is closed: funds were declared exhausted in November 2025, and previously booked credits must be used by the end of 2026.
• From January 1, 2026, to September 30, 2028, the new hyper-depreciation applies, offering cost uplifts of up to 180%.
• Certified energy savings targets are no longer required: this is the most substantial change from the previous scheme.
• The benefit is not cashed in immediately via tax offsets: it reduces taxable income across the asset depreciation schedule, requiring sufficient taxable capacity.

What happened to the Transition 5.0 tax credit

The measure introduced in 2024 provided a tax credit proportional to the investment, contingent upon a certified reduction in energy consumption. Available funds were officially declared exhausted by directorial decree in November 2025.
Those who had already booked the tax credit can offset it via F24 by the end of 2026, according to the communications submitted to the GSE. For a portion of the companies left out due to fund depletion, Decree-Law 38/2026 introduced partial relief.
The interim closing deadlines have been revised multiple times, and public sources do not align on all dates. Anyone with an open application should verify their status directly on the GSE portal, rather than relying on third-party summaries.

What hyper-depreciation is and why it is not the same thing

This technical distinction carries major practical consequences and must be understood before running the numbers.
The tax credit was an amount that could be directly offset via the F24 tax payment model, translating into rapid cash-flow relief and functioning well even for companies with modest tax liabilities.
Hyper-depreciation, by contrast, increases the asset's cost solely for tax deduction purposes: an investment of 100 with a 180% uplift is deducted as if it cost 280. The tax benefit is spread across the depreciation schedule and only materializes if there are taxable profits against which to deduct it.
This leads to two key consequences. First, the financial benefit arrives in subsequent tax periods and cannot be factored into 2026 advance tax payments. Second, a loss-making business or one with low profitability will gain far less than it would have from the tax credit.

Rates and brackets

The tiered bracket structure concentrates the greatest advantage on smaller investments, making it an advantageous framework for small and medium-sized enterprises.

What qualifies for incentives

Two categories of investment are eligible.
New tangible and intangible capital goods listed in Annexes IV and V of Law 199/2025. These are new lists replacing the former Annexes A and B of Law 232/2016, so it cannot be assumed that an asset eligible yesterday remains eligible today.
Self-generation plants using renewable energy sources for self-consumption, capped at a maximum capacity of 105% of the production unit's annual energy demand.
On this second point, one rule caught many by surprise: Decree-Law 38/2026 removed the requirement for European origin for capital goods, but maintained it for photovoltaic modules, which remain eligible only if manufactured in Europe.
In all cases, the interconnection requirement remains: the asset must be connected to the company's production management system or supply network. This is the central criterion upon which most eligibility assessments depend.

What changes compared to Transition 5.0

The second row carries the most weight. The former scheme was an energy efficiency incentive disguised as a digitalization incentive: without verified savings, you could not access it. The new scheme is strictly a digitalization incentive.
For businesses, this represents a major simplification, removing the most costly and uncertain part of the filing process. For policymakers, it marks a strategic shift worth noting.

The procedure in three steps

Everything is managed through the GSE portal, operational from June 2026.
Prior booking notice, submitted for each production facility, detailing the planned investments.
Confirmation notice, to be transmitted within the required deadlines following positive assessment, certifying investment progress.
Completion notice, with a final deadline set for November 15, 2028.
A sworn technical appraisal drafted by a qualified engineer or accredited certification body is mandatory, along with accounting certification of actual expenses issued by a statutory auditor. Unlike the former Industry 4.0 framework, the technical appraisal is required regardless of investment amount.

Energy monitoring, EMS, and digital twins: what is eligible

A sworn technical appraisal drafted by a qualified engineer or accredited certification body is mandatory, along with accounting certification of actual expenses issued by a statutory auditor. Unlike the former Industry 4.0 framework, the technical appraisal is required regardless of investment amount.
In Annex V, covering intangible assets, explicit entries cover software and platforms for intelligent energy management, site-level EMS platforms, AI algorithms for predictive maintenance, and digital twin applications.
In Annex IV, covering tangible assets, the section dedicated to quality and sustainability includes smart components and systems for energy management as well as energy and water consumption monitoring.
In practice: an energy management platform along with its associated sensor systems, a predictive maintenance system, and a digital twin fall squarely, on paper, within eligible asset classes.

The critical point if you manage buildings rather than production plants

This section requires careful attention, as it is where many applications encounter hurdles.
The annexes are structured around the logic of a production facility. The interconnection requirement refers to a company production management system or supply network, and the sworn appraisal must prove that the asset satisfies those criteria.
For a manufacturing plant monitoring departmental consumption and feeding data into its production management systems, the path is straightforward.
For a hotel, healthcare facility, corporate headquarters, or retail chain—where monitoring concerns the building rather than an industrial process—proving compliance is far more challenging and, in several cases, unsustainable.
This is not a nuance to address after the fact. It is the very first question to pose to the certifier who will sign the technical appraisal before structuring any investment around this incentive.
Directness benefits everyone: a project halted by a failed appraisal wastes the client's time and damages the provider's credibility.

Why measuring makes sense even without an obligation

Under the old scheme, monitoring was a mandatory compliance step: without pre- and post-intervention data, the tax credit could not be granted. That is no longer the case, and there is a risk that monitoring gets dropped from projects once it is no longer obligatory.
That would be a mistake, for three very practical reasons.
Without measurement, you cannot target capital effectively. Prioritizing interventions based on gut feeling almost always channels funds where ROI is lowest, as demonstrated by the methodology detailed in our energy management guide.
Without measurement, you cannot prove results. While tax authorities no longer mandate it, corporate leadership still will, and the question will arise when requesting the next round of capital expenditure.
The data is needed elsewhere. Organizations subject to mandatory energy audits, ISO 50001 certification, or corporate sustainability reporting must collect this data anyway, meaning metering pays for itself across multiple fronts.

The tools

The UTwin energy management software measures energy, water, and environmental parameters using smart meters and IoT sensors, visualizes data across property or plant layouts, flags anomalies, and enables remote facility control.
The integrated maintenance management software transforms detected anomalies into traceable work orders inside a digital twin connecting components, history, and documentation.
Regarding incentives, there is only one correct approach: verify specific case eligibility with your technical certifier before launching the project. The qualifying categories exist, but the physical configuration determines the outcome.

Frequently asked questions

• Is the Transition 5.0 tax credit still active?

  No. Available funds were officially declared exhausted by directorial decree in November 2025 and the scheme is closed to new investments. Previously approved credits can be used in tax compensation via F24 through the end of 2026. From 2026 onward, the applicable framework is the new hyper-depreciation.

• How much is the new hyper-depreciation worth?

  The deductible cost uplift is 180% for investments up to 2.5 million euros, 100% on the portion between 2.5 and 10 million euros, and 50% on the portion between 10 and 20 million euros. Investments exceeding 20 million euros receive no uplift.

• Do you need to prove energy savings?

  No, and that is the primary difference compared to Transition 5.0, which required a certified energy consumption reduction of 3% across the production facility or 5% on the targeted process. The new hyper-depreciation requires neither energy savings targets nor preliminary energy audits.

• Is energy monitoring software eligible?

  Eligible categories exist in the annexes for both software and IoT hardware. However, practical eligibility hinges on the interconnection requirement and operating context, which must be certified by the qualified engineer in the sworn appraisal. Applications tied to industrial processes face a much simpler assessment than building management applications.

• By when must the investment be made?

  Investments must be carried out between January 1, 2026, and September 30, 2028, with the completion notice submitted to the GSE by November 15, 2028. All filings are submitted via the GSE portal and require a sworn technical appraisal and accounting certification.