On 10 May 2018, the Polish Parliament adopted the Act on supporting new investments (the "Act"). The new law is to replace the current investment support system, laid down in the Act of 20 October 1994 (as amended) on special economic zones (the "Act on SEZ").
The most fundamental change introduced under the Act is the possibility to grant support for investments implemented, in principle, in any location across entire Poland. Thus, the Act rejects the current system of separating out special economic zones. Such solution, in the opinion of the legislator, will make the support system more attractive to investors, while allowing for the elimination of the complicated and lengthy procedure of extending the borders of special economic zones.
Pursuant to the Act, the entire country is to be divided into areas covering a couple of poviats each. These areas will be managed by entities who have so far been in charge of the special economic zones. As indicated in the explanatory memorandum to the Act, it will allow to exploit their previous experience in servicing investors and the existing organizational structure.
The support for the new investments is to be granted in the form of an exemption from income tax. The decision on the support provided for in the new provisions will be issued for a term of 10 to 15 years (depending on the intensity of the state aid established for a given area). Such solution will ensure an unambiguous definition of the time for which the support will be provided. The decision on the support will specify the conditions that an entrepreneur is obliged to meet (including the employment of a specified number of employees or incurring the eligible costs of investments within a specified period).
Any investment benefiting from the support will have to meet not only the quantitative criteria (understood as the minimum investment costs, depending on the level of unemployment in a given district), but also the qualitative criteria (meaning the conditions of compliance with the medium-term national development strategy). These criteria will be specified in detail in the regulation issued by the Council of Ministers.
It is also worth noticing the changes in the tax regulations, introduced by the Act, set out in the justification of the draft Act as a "small anti-optimization clause". According to said provision, an entrepreneur will lose their right to a tax exemption if the generation of income from business activity conducted within a special economic zone on the basis of permit or from business activity set out in the decision on support occurs in connection with a legal act performed first and foremost to obtain exemption from income tax, the activity has no real character or the entrepreneur undertakes legal actions the main or one of the main goals of which is to avoid or evade taxation.
Entrepreneurs currently operating in special economic zones will continue to receive support in accordance with their permits to run business on the territory of a zone. The Act on SEZ, though with some amendments, will remain in force and will apply to the already issued permits until the current support scheme based on the system of special economic zones expires, that is until 31 December 2026.
Once the legislative process is concluded, the Act will become effective after 14 days from the date of its promulgation (excluding certain provisions amending the Act on SEZ, for which provisions a twelve-month vacatio legis has been provided).
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