It’s high time for new investments
Works on the Act on Supporting New Investments are gaining momentum. In December 2017 the consultation process was completed, at the beginning of March the proposal was approved by the Council of Minister, and already on 20 March there was the first reading of the proposal of the Act in the Parliament. We may thus assume that in April the Act will be signed by the President.
Similarly as the solutions on Special Economic Zone applicable at the moment, the proposal assumes that income from economic activity specified in a decision issued on support will be exempt from personal and corporate income tax. But contrary to the current regulations, entrepreneurs will not be restricted by having to invest only in separated zones, so the authors of the proposal count on the economic activation of the entire country.
The way how to determine the amount of granted exemption will be regulated in a relevant implementing instrument to the Act – Regulation of the Council of Ministers. According to its proposal, the entrepreneur-investor applying for a decision on support will have to satisfy the criterion of eligible costs of the investment:
| Unemployment rate in the county where the investment is planned in relation to national average unemployment rate | Eligible costs of the investment |
| 0% - 60% | At least PLN 100 million |
| 60% - 100% | At least PLN 80 million |
| 100% - 130% | At least PLN 60 million |
| 130% - 160% | At least PLN 40 million |
| 160% - 200% | At least PLN 20 million |
| 200% - 250% | At least PLN 15 million |
| Over 250% | At least PLN 10 million |
What is extremely significant, the thresholds of investment costs presented above will be subject to significant reduction:
| Reduction criterion | Reduction of eligible costs of the investment |
| Investment within the scope of modern services for business and R&D works | 80% |
| Micro-entrepreneurs | 98% |
| Small entrepreneurs | 95% |
| Medium entrepreneurs | 80% |
The amount of tax exemption will be calculated as follows:
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maximum intensity of the assistance specified for a given area multiplied by incurred costs of the investment eligible for assistance, or
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maximum intensity of assistance specified for a given area and labour costs of newly employed personnel over two years, covering costs of gross payroll of such personnel plus contributions paid by the employer.
Apart from indicated tax benefits, the proposal assumes also a number of benefits which will facilitate the carrying on of new investments by entrepreneurs, including especially:
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making available to entrepreneurs assets of property necessary for carrying on the investment;
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free-of-charge provision of IT services;
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assistance in contacts with public administration authorities;
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co-operation within the scope of recognising needs of the labour market in the process of education;
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carrying on measures which promote economic activities and new investments.
The proposal assumes that new regulations will enter into force within 14 days of the date of publishing the Act. We will inform you on an ongoing basis about progress of the legislation process.
Daniel Więckowski, Tax Advisor, ATA Tax Sp. z o.o.