Entities investing in SEZs used to be granted an income tax exemption (tax credit), being a portion (between 30% and 50%) of the so-called qualified expenditure (mainly expenditure on fixed assets) or the number of new employees. One of the prime conditions was that businesses should be located within one of the dedicated areas spread around Poland. These dedicated areas - some large, some small - are spread across a total of 25,000 ha/0.08% of Poland. Nearly all types of production and some service businesses could qualify, but the location of the zone was not always convenient.
Under the new law expected to be issued and binding in the second half of 2018, the exemption will be available regardless of the location, provided it is within the borders of Poland. So Poland itself will become an SEZ.
In order to be entitled to the tax exemption, taxpayers will have to apply for a special zone permit which will require a presentation of the project. The proposal for the new investment will have to go through an assessment process, similar to existing procedures, but with slightly different criteria applied.
The first criterion is a tangible one: a minimum investment in fixed or intangible assets (either creating new or modernising existing business units) is required. This will differ from region to region depending on unemployment levels, but will range from €2.5 million to €25 million for small or medium businesses. The new law will specify equity requirements.
The second criterion will be score-based (1 to 10 points), with points allocated in relation to compulsory responses as regards the following components:
- the number of highly paid new jobs and offering of stable employment;
- the project being in an industry which increases the country's competitiveness in regional markets;
- whether exports are involved;
- cooperation with institutes and research and development (R&D) centres;
- building service centres for customers outside Poland;
- located in a high unemployment region;
- involving small and medium-size entrepreneurs;
- participation in sector clusters;
- R&D performance;
- supporting employees in education and increasing professional competence; and
- benefits for employees.
The exemption will be available for the time period defined in the zone permit (10 to 15 years).
The exemption will be a percentage (between 20% and 50%) of qualifying investment expenditure depending on the region and its unemployment.
Some listed industries will not be entitled to the zone permit, for example, construction services or insurance.
It is expected that with this new system of tax exemptions, Poland will be an even more attractive location in which to do business.
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