Decision on support
The Polish Investment Zone is an instrument of support, implemented by way of the Act of 10 May 2018 on supporting new investments (consolidated text: Journal of Laws of 2020 item 1752, of 2021 item 2105),
which enables entrepreneurs, performing new investments in the territory of the whole of Poland, to obtain an exemption from income tax (CIT or PIT) for the period of 10-15 years, in the amount of even up to 70% of the value of the planned investment.
The new investment can be implemented both on public and private areas.
To benefit from this form of support, an entrepreneur must receive a decision on the support to be issued upon request of the entrepreneur, on behalf of a minister of economy, by the Suwałki Special Economic Zone S.A. (Joint-Stock Company) if a new investment is performed on the area managed by the Suwałki Special Economic Zone S.A.
Pursuant to Article 2 of the Act of 10 May 2018, on supporting new investments (consolidated text: Journal of Laws of 2020 item 1752, of 2021 item 2105), a new investment shall be construed as:
• Establishment of a new enterprise
• Increasing production capacity
• Introduction of new products
• Change of a production process
• Purchase of assets belonging to an establishment that has been closed or would have been closed had the purchase not occurred, with the assets being acquired by an entrepreneur unrelated to the seller and the mere acquisition of stock or shares is excluded
The following can count on state aid, in the form of tax exemption within the framework of the Decision on the Support:
• 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. Also companies from the sector of metallurgy, iron, and steel, coal sector are excluded from the support, under EU provisions.
• selected enterprises from the modern services sector (BSS) rendering services such as, e.g.: specialist IT services, selected accounting and bookkeeping services, telephone centre services, architectural and engineering services, or advisory services in matters pertaining to the environment.
The detailed scope of activity for which the Decision on the Support is not issued is contained in § 2 of the Regulation of the Council of Ministers on state aid granted to certain entrepreneurs for the implementation of new investments.
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) and the fallowing districts: Łosice, Sokołów Podlaski, Węgrów (Mazowian Voivodeship)
Ostrów Mazowiecka district
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 separated in accounting and organisational terms, and the amount of the exemption shall be determined on the basis of the data (revenues and costs) of a separated activity.
An entrepreneur that carries out a new investment as part of the Polish Investment Zone may obtain public aid on account of:
1) costs of the new investment (maximum amount of public aid is counted as the product of maximum intensity of the aid determined for a given area and costs of the investment qualified for the aid)
2) creation of new jobs in connection with the new investment (maximum amount of the public aid is counted as the product of maximum intensity of the aid determined for a given area and two-year labour costs related to newly employed staff, including gross pay costs of those employees, increased by obligatory contributions, such as for social insurance, incurred by the entrepreneur from the date of employment of those staff members)
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 modernisation of fixed assets (e.g. machines), costs related to rental or lease, purchase costs of intangible assets (computer software, licences, certificates, etc.)
• two-year labour costs of employees hired in connection with the 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 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, of 2021 item 2483).
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 of the Podlaskie Voivodeship and in the following districts: Ełk and Gołdap (Warmińsko-Mazurskie Voivodeship) and in the following districts: Łosice, Sokołów Podlaski, Węgrów (Mazowieckie Voivodeship) – at least 4 points (but not less than one point for each of the criteria);
- in the area managed by SSSE S.A., located within the border-lines of the Ostrów Mazowiecki district in the Mazowieckie Voivodeship – at least 5 points (but not less than one point for each of the criteria).
An entrepreneur applying for the support is obliged to fulfil the quantitative criterion, i.e. incur minimum eligible costs the amount of which is dependent on the unemployment rate in the district (level of average unemployment rate is assumed in line with the data, up-to-date at the date of submitting the request for issuing the Decision on the Support, concerning the average unemployment rate in the country and in the territory of the districts, announced by the President of the Central Statistical Office of Poland (GUS)).
Furthermore, regardless of the unemployment rate in the district in which the investment is performed if larger part of the area on which the investment will be implemented is located in:
1) medium-sized town losing socio-economic functions or
2) municipality in the territory of which the town is located or
3) municipality bordering on the municipality in the territory of which the town is located or on the town, losing socio-economic functions
An entrepreneur must incur eligible costs on an investment of at least PLN 10 million.
A list of the towns losing socio-economic functions is available on: “Medium-sized towns losing socio-economic functions”. Within the area managed by SSSE S.A., the towns are as follows: Augustów, Bielsk Podlaski, Ełk, Grajewo, Hajnówka, Łomża, Ostrów Mazowiecka, Sokółka, Zambrów.
The base value of minimum costs to which an Entrepreneur is obliged is dependent on the applicable unemployment rate in the district and location of the investment (medium-sized towns and neighbouring municipalities)
Minimum costs - base value (for large entrepreneurs) stated in million PLN
|District Ostrowski /location in Ostrów Mazowiecka
|District Augustowski /location in Augustów||20/10|
|District Bielski /location in Bielsk Podlaski||80/10|
|District Grajewski /location in Grajewo||20/10|
|District Hajnowski /location in Hajnówka||60/10|
|District Łomżyński /
|Distroct Sokólski /location in Sokółka||20/10|
|District Zambrowski /location in Zambrów
|City with district status Białystok||60|
|City with district status Łomża
|City with district status Suwałki||80|
|District Ełcki /location in Ełk||20/10|
The Regulation of the Council of Ministers of 28 December 2021 amending the Regulation on state aid granted to certain entrepreneurs for the implementation of new investments (Journal of Laws of 2021 item 2483) introduces the possibility of reducing eligible costs, which is described in detail in §4 (4) of the Regulation.
The definition of micro, small and medium-sized enterprises is contained in Annex 1 to Commission Regulation (EU) No. 651/2014 of 17 June 2014, declaring certain categories of aid as compatible with the common internal market in application of Articles 107 and 108 of the Treaty (Official Journal of the European Union L 187 of 26/06/2014, as amended).
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 Ostrów Mazowiecki district of the Mazowieckie Voivodeship: this is a period of 12 years.
For investments located in the Podlaskie Voivodeship and in the Ełk and Gołdap districts (Warmińsko-Mazurskie Voivodeship), and in the following districts: Łosice, Sokołów Podlaski, Węgrów (Mazowieckie 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 will allow employees of the Departments to provide an Entrepreneur either with necessary information on the support, initial project 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 accede 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; of 2021 item 2483) alongside necessary documents.
A list of documents required from an Entrepreneur in the proceedings for the issue of the Decision on the Support of a new investment:
1. Cover letter to the application for issuing the Decision on the Support – to be downloaded
2. Completed application for the Decision on the Support – form of the application to be downloaded
3. Entrepreneur’s declarations concerning the way of fulfilling selected qualitative criteria. (The declarations include the name of the selected criterion, way of fulfilling the criterion and way of verifying the fulfilment of the selected criterion according to Table No. 1 or Table No. 2 attached as Annex 1 to the Regulation).
4. An Applicant's up-to-date registration document (KRS [NCR] or CEIDG [Central Registration and Information on Business])
5. Company's agreement confirmed for compliance with the original - if applicable
6. 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 a new company – financial statement and mother company statement for the last tax year)
7. Excerpt from the land register or excerpt from the land register with a copy of cadastral map (is the plot is built up) regarding a real property on which a new investment will be implemented
8. Declarations submitted in the procedure for issuing the Decision on the Support:
a) Entrepreneur’s declaration that the entrepreneur settles accounts on time with the Tax Office and Social Insurance Institution (ZUS) and that the entrepreneur is not in any public and legal arrears whatsoever,
b) Entrepreneur’s declaration that the data are consistent with the present legal state,
c) Entrepreneur’s declaration that the transaction of purchase of assets belonging to an establishment that has been closed or would have been closed had the purchase not occurred, will be carried out on market terms - if applicable,
d) Large entrepreneur’s declaration that the fixed assets referred to in (1)(2) will be new, except the implementation of a new investment within the meaning of Article 2(1)(b) of the Act of 10 May 2018 on supporting new investments - i.e. purchase of assets belonging to an establishment that has been closed or would have been closed had the purchase not occurred - if applicable
e) Entrepreneur’s declaration that the foregoing declarations have been made and submitted being aware of criminal liability for making and submitting false declarations, under Article 233 § 6 of the Criminal Code Act of 6 June 1997 (Journal of Laws 2021 item 2345, consolidated text)
9. Consent to the processing of personal data
10. Information form submitted when applying for aid other than de minimis aid or de minimis aid in the agriculture or fisheries sectors - 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)
The issue of the Decision on the Support or the issue of the decision on discontinuance of the proceeding shall end the procedure.