Decision on support
The Act of May 10, 2018, on supporting new investments has introduced a new mechanism for granting state aid to entrepreneurs.
The new Act allows for the exemption from income tax on the whole area of Poland by entrepreneurs implementing new investments, both in public and private areas. At the same time, the hitherto permits for conducting business activities in special economic zones shall remain in force until the end of 2026.
The support is granted to an Entrepreneur implementing a new investment, through the Decision on the Support.
Pursuant to art. 2 of the Act of May 10, 2018, on supporting new investments (Journal of Laws of 2018, item 1162), a new investment shall be construed as:
• Establishment of a new enterprise
• Increasing production capacity
• Introduction of new products
• Change of a production process
For state aid, in the form of tax exemption within the framework of the Decision on the Support, they can count:
• enterprises from the traditional industry sector, with the exception of enterprises producing, inter alia: explosives, alcohol, tobacco products, steel or companies conducting activity in the energy generation and distribution sector; enterprises dealing with wholesale and retail trade, facilities and construction works, in the scope of services related to accommodation and catering services and running game centres. In line with the EU provisions, companies from the metallurgy, iron and steel sectors, as well as the coal sector shall also be excluded from being granted with the support.
• selected enterprises from the business services sector (BSS) providing: IT services, research and development in the areas of natural and technical sciences, auditing and book keeping services, accounting (excluding tax declarations), technical research and analysis services, call centres, architectural and engineering services.
The detailed scope of activity for which the Decision on the Support is not issued is contained in § 2 of the Regulation on state aid granted to certain entrepreneurs for the implementation of new investments (Journal of Laws of 2018, item 1713).
THE AMOUNT OF STATE AID
An entrepreneur implementing a new investment project within the area managed by Suwałki Special Economic Zone S.A. may be granted with public aid in the form of income tax exemption up to 70% of the value of invested capital. This is the highest level of state aid across the country.
The intensity of accessible aid in the area managed by Suwałki Special Economic Zone S.A. is shaped as follows:
Size of an enterprise
Districts of Podlaskie Voivodeship,
Districts: Ełk and Goldap (Warmian-Mazurian Vivodeship)
Łosice, Ostrów Mazowiecka, Sokołów Podlaski, Węgrów (Mazowian Voivodwship
Form of state aid
EXEMPTION FROM CIT or PIT
Only income obtained from business activities, conducted within the framework of an investment covered by the Decision on the Support, may be covered by relief. Thus, if an Entrepreneur also conducts business activity not subject to the support, supported activity should be organisationally separated, and the amount of the exemption shall be determined on the basis of the data (revenues and costs) of a separated activity.
Eligible costs of a new investment, in accordance with the Regulations on State Aid, shall be, inter alia, as follows:
• cost of land purchase, cost of either purchase, development or modernization of fixed assets (e.g. machines), purchase costs of intangible assets (computer software, licenses, certificates, etc.)
• two-year labour costs of employees hired in connection with new investment
DECISION ON THE SUPPORT
The Decision on the Support shall be issued at the request of an Entrepreneur, and a minister competent for the economy shall be a competent authority in matters of supporting a new investment (currently, Minister of Entrepreneurship and Technology).
Pursuant to the Regulation of the Minister of Entrepreneurship and Technology of August 29, 2018, on the entrustment to the managing entity of the Suwałki Special Economic Zone of issuing the decision on the support and executing control over the implementation of the decision on support, Suwałki Special Economic Zone S.A. [Joint-Stock Company] shall issue the Decision on the support of new investment implemented in the area managed by SSSE S.A.
The Decision on the Support determines the period of its binding force, subject of business activity, as well as terms and conditions (criteria) which must be fulfilled by an entrepreneur, pertaining to:
• employment by an entrepreneur of a particular number of staff members in connection with new investment, for a defined period of time;
• incurrence of eligible costs of new investment by an entrepreneur within a defined time limit
• time limit for finalization of new investment, after the expiry of which investment costs incurred by an entrepreneur cannot be considered as eligible costs;
• maximum amount of eligible costs which may be taken into consideration during the determination of the maximum amount of the state aid;
• quantitative criteria and qualitative criteria to the fulfilment of which an entrepreneur has undertaken;
• area on which new investment will be executed in consideration of recording data of real property
The Decision on the Support for new investment is an administrative decision issued in compliance with provisions of the Code of Administrative Procedure.
ENTREPRENEUR’S INVESTMENT PROJECT - Qualitative and quantitative criteria
An Entrepreneur will obtain the Decision on the Support of a new investment if particular qualitative and quantitative criteria of an investment project are met.
The qualitative criteria( to download) are set out in Annex 1 to the Regulation on state aid granted to certain entrepreneurs for the implementation of new investments (Journal of Laws of 2018, item 1713).
So that a given investment project will be qualified for the support, it must receive an appropriate number of points awarded for meeting particular criteria:
- in the area managed by SSSE S.A., located within the border-lines the Podlaskie Voivodeship and within the Ełk and Gołdap districts – at least 4 points out of 10;
- in the area managed by SSSE S.A. located within the border-lines of the following districts: Łosice, Ostrów Mazowiecka, Sokołów Podlaski and Węgrów– at least 5 points out of 10.
In order to be qualified for the support programme, an investment must involve a correspondingly high eligible outlays (to download), depending on an Entrepreneur status (LARGE/MEDIUM/SMALL/MICRO) and on the unemployment rate in the district adequate for a new investment location (unemployment in a given district is assessed in line with announcements from the President of the Central Statistical Office, published once a year).
minimum investment outlays LARGE Entrepreneur from PLN 10 million to PLN 80 million
minimum investment outlays MEDIUM Entrepreneur from PLN 2 million to PLN 16 million
minimum investment outlays SMALL Entrepreneur from PLN 500,000 to PLN 4 million
minimum investment outlays MICRO-Entrepreneur from PLN 200,000 to PLN 1.6 million
In order to calculate the amount of costs that an entrepreneur applying for the support shall be borne to incur, it is also important to locate investment in a medium-sized town losing socio-economic functions, as well as in a municipality bordering such a town. A list of such towns is made available at the following link: “.LIST OF TOWNS” (to download)
Within the area managed by SSSE S.A., the towns are as follows: Augustów, Bielsk Podlaski, Ełk, Grajewo, Hajnówka, Łomża, Ostrów Mazowiecka, Sokółka and Zambrów.
In either the listed towns and municipalities bordering these towns, the minimum investment outlays are as follows: PLN 10 million - LARGE, PLN 2 million - MEDIUM, PLN 500,000 - SMALL, PLN 200,000 - MICRO-ENTREPRENEUR
The definition of micro, small and medium-sized enterprises is contained in Annex 1 to Commission Regulation (EU) No. 651/2014 of June 17, 2014, declaring certain categories of aid as compatible with the common internal market in application of art. 107 and 108 of the Treaty (Official Journal of the European Union L 187 of 26/06/2014, as amended), [to download]
Detailed calculation of eligible investment costs that an entrepreneur shall be held obliged to pay, depending on the location of investment in a given municipality, is presented in the following map.
After selecting a municipality with a cursor, the amount of minimum costs that an Entrepreneur is borne to incur shall be displayed.
THE DURATION OF THE DECISION ON THE SUPPORT
Decisions on the Support of a new investment, implemented within the area managed by SSSE S.A., shall be issued for a fixed period of time, for either 12 or 15 years, depending on the intensity of state aid in a given voivodeship.
For investments located in the districts of the Mazovian Voivodeship, i.e. Łosice, Ostrów Mazowiecka, Sokołów Podlaski and Węgrów this is a period for 12 years.
For investments located in the Podlaskie Voivodeship and in the Ełk and Gołdap districts, situated in the Warmian-Masurian Voivodeship, this is a period of 15 years.
The duration of the Decision also determines the period during which tax exemption benefit may be used.
PROCEDURE FOR OBTAINING THE DECISION ON THE SUPPORT
Prior to the submission of the Application for issuing the Decision on the Support, we warmly encourage Entrepreneurs to contact the Investor Assistance Department in Ełk or the Investor Assistance Department in Suwałki, depending on the location of investment CONTACT.
This shall have allowed employees of the Departments to provide an Entrepreneur either with necessary information on the support, project initial assessment (e.g. whether a given scope of activity is covered by the support) or discussion of a procedure for obtaining the Decision on the support.
The subsequent step is to submit a cover letter, in which you shall inform us that you proceed to the procedure of issuing the Decision on the Support, as well as the completed Application for the Decision, consistent with the template, which constitutes Annex 2 to the Regulation on state aid granted to some entrepreneurs for the implementation of new investments (Journal of Laws of 2018, item 1713) alongside necessary documents.
A list of documents required from an Entrepreneur in the proceedings for the issue of the Decision on the Support of new investment:
1. Cover letter to the Application for the Decision on the Support (selection of a given district or municipality automatically selects an appropriate office of the Investor Assistance Department of SSSE S.A., in line with the competencies of the areas assisted) - to download
2. An Applicant's up-to-date registration document (KRS [NCR] or CEIDG [Central Registration and Information on Business])
3. Company's agreement confirmed for compliance with the original
4. Completed application for the Decision on the Support - an application’s template to download
5. Financial statements for the last three fiscal years (balance sheet, profit and loss account) or tax declarations (PIT) for the last three years (in the case of new company – financial statement and mother company statement for the last tax year)
6. Full excerpt from the land register regarding a real property on which new investment will be implemented
7. A certificate from a competent office/authority including data (e.g. from the MIDAS system) regarding the lack of occurrence of undeveloped mineral deposits on real property as referred to in the Application for the Decision on the Support
8. Information form presented when applying for aid other than the aid in agriculture or fisheries, the de minimis aid or the de minimis aid in agriculture or fisheries - form to download
9. A certificate from the National Criminal Register and an entrepreneur's declaration on the lack of criminal record of an entrepreneur (resulting from art. 14 par. 2 of the Act on supporting new investments)
10. Statements resulting from the list of documents submitted to a cover letter to the application for the Decision on the Support (5 statements)
I. Statements no. 1 (non-arrears both in the Tax Office and Social Insurance Institution, bankruptcy proceedings, compliance with the current legal status - a template to download
II. Statements no. 2 (obligation to either enter into a contract, transmit information, participate in the evaluation programme) - a template to download
III. Statements no. 3 regarding competences of the tax office - a template to download
IV. Statements no. 4 regarding the ineligibility of energy-related costs - a template to download
V. No. 5 Consent to the processing of personal data - to download
The definition of micro, small and medium-sized enterprises is contained in Annex 1 to Commission Regulation (EU) No. 651/2014 of June 17, 2014 , declaring certain categories of aid as compatible with the common internal market in application of art. 107 and 108 of the Treaty (Official Journal of the European Union L 187 of 26/06/2014, as amended), [to download]
The issue of the Decision on the Support or refusal of its issue shall end the procedure.