The Polish Investment Zone (PIZ) is an incentive for new investment projects in the form of income tax break. This tax break is a public aid and can be obtained regardless of the form of business activity, size of the company, country of origin. It provides an opportunity for tax exemption for all investment in Poland over 10, 12 or 15 years given that they fulfil specific entry criteria.

Income tax exemption

The PIZ exemption allows for CIT exemption or PIT exemption of income generated by activities covered by a decision on support and conducted within the territory specified in this decision. The level of tax exemption depends on location of the investment and size of the enterprise. It may amount to:

  • 10% – 50% for large enterprises,
  • 20% – 60% for medium enterprises,
  • 30% – 70% for micro and small enterprises.

Criteria for tax exemption

In order to obtain the support under new scheme the investor is supposed to fulfill number of criteria (in some cases more challenging than before) i.e. both quantitative and qualitative. Quantitative criteria define the minimum value of investment costs. As investment costs may be deemed capital expenditures or two-year labor costs of newly created work places. The minimum required level of these costs depend on the unemployment rate in the district proper for location of the new investment (in comparison to the average unemployment rate in the country) and the size of the enterprise. The qualitative criteria differs according to the type of investment (slightly different criteria for industrial and service investments). In both cases criteria are divided into two groups:

  • sustainable economic development and
  • sustainable social development

The aid may be granted for both production and service investments. However, it must be noted that certain activities are not allowed to take advantage over PIZ. In terms of service projects the scope of activities that may benefit from tax exemption has recently been extended. The investments involving services that are classified as modern business services or R&D may take advantage of significantly lower quantity criteria. The same refers to micro, small and medium enterprises.

Obtaining the tax relief – decision on support

There are no application rounds – application for tax exemption can be submitted any time during the year. Investor apples for a decision on support to an Area Administrator for the relevant region. As a rule, the application process should not take longer than 30 days from submitting the application. However, the term may be changed in case of need for delivering additional documents for the application.

The decision on support specifies in particular:

  1. Duration period of the decision.
  2. Subject of business activity.
  3. Conditions that the entrepreneur is required to fulfil, in particular:
    1. number of new workplaces to be created by entrepreneur in connection with a new investment within the specified deadline,
    2. the value of capital expenditures to be incurred by the entrepreneur within the specified deadline,
    3. the deadline for the investment completion,
    4. the quantitative and qualitative criteria to which the entrepreneur has committed.
  4. The maximum amount of capital expenditure and two-year labor costs that can be taken into account while determining the maximum amount of state aid.
  5. The area where the investment will be carried out according to the real estate registration data.