A new Act is to come into force on 14 June on Support for New Investments (creating the “Polish Investment Zone”) under which it will be possible to recover a major portion of outlays incurred for new investments (up to 70%)
Tax Poland Commentary 1-2018
The newly introduced support is CIT relief granted for a period of between 10 and 15 years, constitutes state aid, and is classified as regional aid.
Who is entitled to receive the support?
All businesses undertaking new investments anywhere in Poland can make use of the support.
What kind of investments is support available for?
Support is granted for new investments. New investments are considered to be the creation of a new business enterprise or expansion of an existing business enterprise, and this includes production diversification, launching new products, or improvement of the production process.
Receipt of support is conditional upon a favourable evaluation of the nature of the investment in terms of innovativeness, job creation and employment development, job security, and cooperation with the academic sector. The following sectors are preferred in particular:
- shared service centers
- production of means of transport
- production of medical equipment
For certain types of activity, support cannot be granted, for instance production of tobacco or alcohol products, fuels, construction work, some services related to waste management, financial and insurance services, professional services, etc.
Support is granted provided that the minimum level of eligible investment expenditure is incurred, which depends mainly on the region of the investment and the size of the entity making use of the support (from PLN 2 m for medium-sized businesses in selected regions, to PLN 100 m for large businesses in the Warsaw region).
What is the amount of support that can be obtained?
The amount of support is calculated as the product of the intensiveness of aid and eligible expenditure.
The intensiveness of aid depends on the region in which it is to be put to use (10% for Warsaw, 20% - 50% for other regions) and the size of the entity performing the investment – in some regions medium-sized business can recover 60% of eligible investment expenditure (and microbusinesses even 70%).
For large-scale investments (of a value exceeding EUR 50 m) there are special rules for determining the amount of support.
Eligible expenditure itself comprises for instance the price of acquisition of land, the cost of acquisition or production of fixed assets and intangible assets related to technology transfer, and the cost of hiring employees for a period of two years.
What is the procedure for granting support?
For support to be granted, an application has to be submitted and evaluated by a specially selected team, and an administrative decision has to be obtained.